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Profit-Sharing Continuing to Shape Major U.S. Airlines
All of the four major U.S. airlines have released the figures for their 2019 profit-sharing, each doling out hundreds of millions of dollars to employees across their networks. This year’s announcement continues the streak of ‘giving back’ as the airlines — publically and proudly — reward employees for their role in a highly profitable period for airlines worldwide.
Delta announced that in its sixth consecutive year of profit sharing, the airline would be giving back approximately $1.6 billion to eligible employees, paying out around 16.6 percent of each’s annual salary. The airline touted the payouts as a victory for the people that have made the airline the most successful in the United States.
“For years, I would get beaten up by Wall Street,” Delta Chief Executive Officer Ed Bastian said during a U.S. Chamber of Commerce event in Atlanta last week. “They thought the profits were theirs, and ‘why are you giving the profits away to the employees?’ Wall Street has actually come full circle, and they realize that Delta is the most awarded airline in the world because of its employees.”
Delta promotes the profit-share as a boon to local economies. The airline firmly believes the money it gives back cycles through businesses, both large and small, in a way that provides economic benefits far beyond the original payout amount.
Of course, Delta may be the most prolific profit sharer, but its closest competitor is Dallas-based Southwest Airlines, which this year said it would give back $667 million to employees, $124 million of which stems from a settlement with Boeing over the grounding of the 737 MAX, the Dallas Morning News reported.
With that strong figure, the airline’s average payout will total $11,190, while Delta’s will be just over $20,000. That figure helps to underscore just how dominant Delta is in this area, giving back nearly double what its nearest competitor does, despite having 20,000 more employees than Southwest.
American Airlines, on the other hand, pales in comparison to Delta in this regard. While the carrier did announce that it would be sharing around $213 million with employees after positive numbers for the 2019 fiscal year, the massive size of its workforce means the average employee will only receive around $2,200.
Even though that figure is, of course, monumentally superior to no payout, many of those at American are disappointed with how their company has measured up to competitors in this regard.
“You see Delta and United increasing the financial gap, and it’s not good,” Dennis Tajer, a spokesman for the Allied Pilots Association, which represents 15,000 American Airlines Pilots, told the Dallas Morning News. “What we are getting in profit sharing is minuscule compared to Delta. A lot of that comes down to how you run the operation.”
United falls squarely in the middle, with an average 2020 payout of around $6,100, still nearly triple that of its Fort Worth, Texas-based rival. While those numbers may not seem important, some say that points to another important factor in how airlines run their affairs: the investment they put into their front line employees.
While these numbers are rather inconsequential to the average consumer or passenger aboard Delta, United, American or Southwest, they continue to correlate with the public’s perception of the companies. Delta continues to lead the pack in the eye of travelers when it comes to the quality of the overall experience — and especially the quality of service — an area where American, in particular, has fallen behind.
So even though each of those dollars may be one that investors won’t be seeing in their pockets, they have proven to be an indicator of the environment travelers can expect in the months ahead.
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