Skift Take

Delta's CEO appears confident following third quarter earnings that were better than analysts predicted, and he maintains that Richard Anderson's departure was part of the succession plan all along.

Delta Air Lines CEO Ed Bastian denied that a prospective pay raise for its pilots is tied to a pilot shortage, saying he faces no such shortfall at Delta.

This contrasts with the company’s 2015 Form 10-K, required by the Securities and Exchange Commission, which notes that “some third-party regional carriers are facing a shortage of qualified pilots due to government mandated increases in flight experience required for pilots working for airlines. If this shortage becomes more widespread, third-party regional carriers may not be able to comply with their obligations to us.”

“The employees are getting raises and they should get raises,” said Bastian.

Bastian made his remarks Thursday in an interview with CNBC and commented on a tentative, though not yet ratified, labor agreement with its pilots.

Yesterday Delta announced their third quarter earnings, which exceeded analysts’ expectations. “Our demand was really strong this quarter. In fact, we had some of the strongest days of our history this summer. Our margins are the second best in our history, so I don’t see any softening on our outlook,” said Bastian. He expects a 19 percent operating margin and $6 billion in profits this year.

To the surprise of many, Delta’s executive chairman and former-CEO Richard Anderson announced his retirement on Tuesday. According to Bastian, there was no cause for shock. “This was part of the succession planning. Richard’s a great friend… we had a great chairman in Richard and we’re blessed to have another great chairman in Frank [Blake].”

Delta is still addressing negative publicity on the company’s massive tech outage that occurred in August, which resulted in over 2,000 canceled flights. Bastian again chalked up the incident to internal shortcomings, asserting that it was not the result of a cyber attack from outside. Bastian said, “We’re under attack as all industrial companies are under attack on a daily basis; that said, they don’t penetrate the firewall… this was a failure on our part, we didn’t have the redundancies in place that we needed.”

Watch CNBC’s interview segment here.

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Tags: delta air lines, earnings, labor

Photo credit: Delta CEO Ed Bastian spoke to CNBC after the company's third quarter earnings call. CNBC / CNBC

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