Consultant Insight: Delta pilots vote in favor of a strike authorization ballot

Delta Air Lines pilots voted in favor of a strike-authorization ballot as the airline's cargo volumes, in terms of cargo revenue tonne miles, return to pre-pandemic levels. Delta pilots have been working under an agreement negotiated in 2016. Negotiations for a new agreement began in April 2019 and entered into mediation in February 2020. However, mediation was put on hold from March 2020 until January 2022 due to the COVID-19 pandemic. An agreement has not yet been reached. "Today, Delta's nearly 15,000 pilots sent a clear message to management that we are willing to go the distance to secure a contract that reflects the value we bring to Delta Air Lines as frontline leaders and long-term stakeholders," Jason Ambrosi, chair of the Delta Master Executive Council, said in a statement . "Delta has rebounded from the pandemic. … Meanwhile, our negotiations have dragged on for too long. Our goal is to reach an agreement, not to strike. The ball is in management's court. It's time for the company to get serious at the bargaining table and invest in the Delta pilots." [caption id="attachment_76185" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] Historic revenue On Oct. 13, Delta reported the highest quarterly revenue in its history, 3% above Q3 2019, and $1.5 billion in operating income. It was the second consecutive quarter of double-digit operating margins and was achieved "despite record-high fuel prices and on capacity only 83% restored relative to 2019," Chief Executive Ed Bastian said during the company’s earnings call. Q3 cargo revenue was up 27% year over year and up 41% for the first nine months of the year, compared with the same period last year. Regarding revenue, cargo makes up a small percentage — 2.8% of Q3 total revenue. However, cargo revenue almost doubled its share of total revenue, compared with the 1.5% share in 2019. While Delta's cargo revenue remains strong, volumes, as defined by cargo revenue tonne miles, are returning to pre-pandemic levels and are down 22.4% compared with year-to-date through July 2019. However, Delta's total volumes are up 5.42% YoY, led by the Atlantic lane, up 33.42%, and domestic, up 10.38%. According to a DHL report , Trans-Atlantic capacity is now stable as passenger travel grows. Global belly capacity grew 23% YoY, and the region's volumes are strong compared with other trade lanes like Trans-Pacific. LatAm footprint The Latin America lane will likely see growth as Delta announced the approval of its joint venture with LATAM Group on Sept. 30, as the groups share cargo routes in addition to passenger codeshares. "Delta's partnership with LATAM will help grow the market between North and South America and provide significant and much-needed benefits for customers, and we applaud the [U.S. Department of Transportation] for this final approval," Bastian said. "Now, we'll get to work with LATAM to transform the travel experience for our collective customers and create new opportunities for our employees." However, a strike could jeopardize the agreement. Before a strike can occur, the National Mediation Board will first decide if additional mediation efforts would be productive and offer the parties an opportunity to arbitrate the contract dispute. If either side declines the arbitration, both parties enter a 30-day "cooling-off" period, after which a strike by the union or a lockout by management could occur.

Consultant Insight: Delta pilots vote in favor of a strike authorization ballot

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