Earlier this month, Delta Air Lines rewarded employees with a whopping $1.4 billion bonus, as part of its annual profit-sharing scheme. In contrast to the celebrations amongst Delta employees, United Airlines flight attendants expressed disappointment, questioning why they received a fraction of this amount despite being a unionized airline.
Delta celebrates turning 100-years-old this year and management are using the occasion to deliver a bumper bonus to all the flight attendants that make the company so profitable. While this is one of the airlines’ best financial years yet, Delta has been running a profit-sharing scheme for the past decade and has managed to pay out $10 billion despite the turbulence of the pandemic years.
Delta has much to celebrate this year beyond just turning 100. Announcing its end of year results, the airline generated $5.2 billion in pre-tax income, representing nearly 50% of the entire industry’s profitability. The final quarter of 2024 was equally impressive, taking in $1.2 billion in pre-tax income, marking the largest Q4 profit in Delta’s history and increasing by more than $500 million on the previous year. Commenting on the airline’s results, CEO Ed Bastian succinctly described it as a “great year for Delta” and praised employees for being “difference-makers in this industry”.
Another airline that had a great year was United. The airline achieved a record-breaking financial performance, reporting $57 billion in full-year revenue (the same as Delta) and pre-tax income of $4.2 billion. It also experienced unprecedented demand, flying the most passengers in the airline’s history and operating the largest-ever flight schedule. However, while Delta flight attendants will receive a bonus equivalent to 10.4% of their eligible pay for the year, United flight attendants will only receive a measly 5.3% of earnings.
The most obvious explanation for this discrepancy between United and Delta flight attendants would be differences in commercial performances but as outlined already, both airlines had stellar results. The other possible reasoning would be if United’s profits had declined last year but they were actually stronger than 2023 and continue to be on a steep upward trajectory. Naturally, United flight attendants felt disrespected when they heard that despite profits being up, profit sharing was down by over 40%, questioning why this scheme had been put in place at such a dire financial time as they await a new contract.
The union representing United flight attendants was forced to release a statement defensively explaining why the profit-sharing scheme was so disappointing this year. The Association of Flight Attendants-CWA (AFA) explained that the bonus is not based on United’s overall profit but rather the difference in profitability year over year. This means that United flight attendants only receive profit sharing based on 10% of full-year profits up to the profits of the previous year. Therefore, while the airline had a stellar performance in both 2024 and 2023, it was a smaller jump in profitability compared to 2022 and 2023. As a result, profit sharing was down considerably.
This formula is completely illogical as profit sharing can decrease even as profits grow. It contrasts starkly with flight attendants at Delta and American Airlines who receive increased shares of profits as long as the airlines perform well. From the perspective of a United flight attendant, the ideal situation would be for the airline’s financial performance to zigzag up and down, one year making no profits and taking in huge earnings. While AFA-CWA explained the formula in their statement to members and even shared a graph, they did not acknowledge that they had agreed to this methodology during previous contract negotiations and still decided it would be a good idea to create a scheme that punishes United flight attendants for helping the airline make sizeable profits year on year.
For another airline, the profit-sharing scheme would be frustrating but for United flight attendants, it’s a lethal blow. They have been on stagnant pay for over five years while their counterparts at American and Delta have enjoyed boarding pay, hourly wage increases, and generous profit-sharing schemes that are based on absolute profits. AFA-CWA acknowledges this reality, saying that United flight attendants were counting on the compensation “as a financial bridge in the midst of a national inflation crisis” rather than as a nice bonus. They are right to state this but what are they doing about it?
The irrational profit-sharing scheme is symptomatic of a union that has not been prioritising negotiations. If AFA-CWA had reached an agreement for a new contract like all of their counterparts, United flight attendants would be enjoying better hourly wages and a hefty bonus right now. Instead, AFA-CWA leadership decided to lend out their top negotiator to rival union, Association of Professional Flight Attendants (APFA) in the blind hope that American Airlines would reach an industry leading deal that they could simply replicate. This did not happen and while they awaited a new deal at American, the union spent time conjuring up out-of-touch demands like ground pay compensation and making public but futile arguments that share buyback schemes should be banned in entirety.
Overall, the illogical profit-sharing scheme is the final kick in the teeth for United flight attendants who have already endured so much. It’s completely understandable why they are so angry because their non-unionized counterparts at Delta receive the biggest profit sharing in the entire industry, while United flight attendants don’t get to share in the financial success of their airline. AFA-CWA should focus less on explaining the system and more on changing their members’ contracts for the better. If they do not do this, the whispers around the purpose and efficacy of unions will grow into a shout.
Comments