What does an airline do when employees ask for more security and predictability in their pay while still sharing in the company’s success? Simple—it restructures its employee compensation to put more in base pay while keeping a profit-sharing plan that will provide employees with double-digit payouts when the airline meets its financial goals.
Delta announced today that it is increasing most employees’ base pay by 14.5 percent while continuing to offer a generous profit sharing plan. The company also is increasing its 401(k) dollar-for-dollar match from 5 to 6 percent.
In a memo to employees, CEO Richard Anderson and President Ed Bastian said, “When combined with the April (annual pay) increases, pay rates for most employees will be up 18 percent or more in 2015, providing you with record pay raises in a year of record profits. Few companies can match that.”
Meanwhile, over the past two years Delta has returned over $3 billion to shareholders and has reduced its debt by $10 billion while continuing to invest in aircraft, the onboard customer experience and upgrading facilities worldwide.
Here’s what Delta shared with employees today:
1. Delta is responding to employee feedback by putting more money in base pay.
Base pay rates will increase by 14.5 percent for all eligible merit, ground and flight attendant employees around the world on Dec. 1. When combined with the April increases, pay rates for most employees will be up 18 percent or more in 2015, providing record pay raises in a year of record profits.
2. Profit sharing is here to stay.
The new profit sharing formula, for payouts in 2017 and beyond, shares 10 percent of profits until the airline matches its prior-year profitability and then pays 20 percent of profits, with no limit.3. Delta increases match on 401(k).
Delta will match employees’ 401(k) contributions up to 6 percent of pay starting Jan. 1. With automatic and matching contributions from the airline, which together can equal up to 8 percent of employee earnings, the total will add up to 14 percent of an employee’s earnings.
Delta Air Lines
Delta Air Lines enhances employee downtime
For flight attendants, Airport Customer Service agents and other Delta employees, having a bit of downtime in between flights used to mean heading to a break room or lounge, catching up on emails, reading or connecting with colleagues. That will soon change as the airline introduces the new SkySpa –designed exclusively for employees – scheduled to launch at three airport hubs in early 2016.
Step aside Silicon Valley tech companies, Delta’s SkySpa will feature discounted massages, skin and nail care, hair styling, makeup application and uniform alterations. The purpose of the SkySpa is to help flight attendants, Airport Customer Service agents as well as Cargo, TechOps, Ground Support Equipment and other employees look and feel their best on the job.
“When our employees feel great, it’s reflected in the experience they provide our customers,” said Allison Ausband, Delta’s S.V.P.–In-Flight Service. “Making sure our employees are well taken care of and have the tools to look and perform their best is something we’re proud to do for our people. We know working at the airport or on board can take a toll, and offering the SkySpa at some of our busiest hubs helps address that.”
Delta is partnering with XpresSpa, a premier spa company with a large presence in airports across the country, to help set up the spa-like facilities. Each convenient airport location will feature trained XpressSpa employees to offer a slew of amenities during quick walk-in appointments.
The SkySpa locations will also feature a Fit Line and alteration services to make sure employee uniforms continue to look professional. The opportunity to order new uniform pieces and purchase small accessories will also be available.
“Our uniform speaks to our professionalism and is a prominent part of who we are as an airline,” Ausband said. “A tailored, well-maintained uniform is key to reflecting well on the Delta brand.”
The first SkySpa will open in Salt Lake City in October 2015, with locations in Atlanta and Detroit opening next year.
“We continue to look for thoughtful and innovative ways to make Delta a great place to work and use candid employee feedback to make meaningful improvements and investments,” Bill Lentsch, Delta’s S.V.P.–Airport Customer Service and Cargo Operations, said. “We appreciate the hard work of our employees and think the SkySpa will add real value to the airport work environment.”
Delta Air Lines
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