Skift Travel News Blog

Pilots at Delta Air Lines overwhelmingly approved a new accord with up to 34 percent pay increases on Wednesday.

The Air Line Pilots Association (ALPA), which represents the more than 15,000 pilots at Atlanta-based Delta, said 78 percent of cockpit crew members that voted were in favor of the four-year contract. Roughly 96 percent of eligible Delta pilots voted. The deal includes roughly $7 billion in economic value for pilots, according to the union.

John Laughter, Delta’s chief of operations, said the agreement “recognizes our pilots’ contributions.”

Ratification of Delta’s new accord ups the pressure on other major U.S. airlines to reach similar agreements. American Airlines, Southwest Airlines, and United Airlines are all in negotiations over new contacts with their respective pilot unions.

The agreement also represents a steep increase in costs for Delta, which already faces higher expenses this year than it did before the pandemic. In January, executives estimated that the pilot accord would add as much as 3 percentage points to how much it costs the airline to fly a seat one mile, or what are known as costs per available seat mile, excluding fuel. Delta’s guidance indicates that the metric could be up 23-25 percent in the first quarter compared to 2019.

Updated with comment from Delta.

Delta Air Lines will give its non-union staff, including flight attendants but not pilots, a 5 percent pay raise this April. The move, as CEO Ed Bastian put it in a memo Tuesday, was “well earned” by staff after a challenging 2022.

“This well-earned increase is a direct result of your efforts,” Bastian said. “I can’t thank you enough you for your continued commitment and the care you demonstrate to each other, our customers, and the communities we serve.”

The raise comes as airlines around the world face pressure from mounting costs. Delta saw the amount it costs for it to fly a seat one mile, excluding fuel, jump 13 percent in the fourth quarter compared to 2019. The dramatic increase came as the airline staffed up to pre-pandemic levels amid operational challenges but flew roughly 9 percent less capacity than three years earlier. And Delta forecasts a further 23-25 percent increase compared to 2019 — or 3-4 percent year-over-year — during the quarter ending in March if its pilots ratify a new accord that would raise their pay by 34 percent over four years.

Delta will pay more than $550 million in bonuses to staff, something it historically does on Valentine’s Day. In addition, it comes less than a year after the carrier gave its non-unionized staff members a 4 percent increase. Most of Delta’s roughly 90,000 workers are not organized, the main exception being its more than 13,000 pilots who are represented by the Air Line Pilots Association (ALPA).

Travel demand, however, remains robust with revenue growth, in many cases, outpacing the run up in costs.

Just half of companies located in North America are seeing international bookings recover to their pre-pandemic levels, according to a new poll.

This latest data from the Global Business Travel Association delivers a dose of reality for the travel industry. Most travel agencies are predicting an eventual 70 percent recovery.

The picture is a little better in Europe, where six in 10 companies report a return to 2019 booking levels. Asia Pacific and Latin America are ahead with 65 percent and 77 percent respectively.

The survey polled 217 travel manager members, and they tend to represent bigger corporations. In some ways the association’s State of Global Business Travel report, published Tuesday, backs up reports that it’s the smaller enterprises driving the recovery (explaining why the world’s biggest corporate travel agency, American Express Global Business Travel, has restructured to hone in further on the segment.)

The report also follows bullish airline outlooks, including Delta Air Lines which said corporate travel business was now flatlining at around 80 percent of 2019 levels. There’s a clear discrepancy with the association poll here, but again this could be linked to smaller firms that do not have a managed corporate travel program that are among the carrier’s top international bookers.

However, Southwest Airlines said its managed corporate travel was expected to hit 2019 levels by March. That full recovery is still far off association’s poll results for domestic U.S travel: it found 69 percent of corporations had recovered to pre-pandemic domestic booking numbers, leading both Europe and Asia Pacific by three percentage points. Again this suggests it’s perhaps those smaller companies racing ahead to meet clients face-to-face or attend conferences.

The Global Business Travel Association poll was conducted between Jan. 16 and Jan. 23.

The Lufthansa Group has made an offer to buy a 40 percent stake in Italy’s state-owned ITA Airways, it said Wednesday. The bid comes after a multi-year process, or “beauty contest” as it has been called, to find a strategic partner for ITA, and a dramatic change of fortune for Lufthansa after being counted out last August.

Financial terms of the offer were not made public but Lufthansa said Wednesday that its initial offer for a minority stake includes taking full control of ITA in the future. Italian daily Corriere della Sera has previously estimated the value of the offer to be between $250-260 million (€230-240 million). The German airline group and Italy’s Ministry of Economy and Finance must next agree to a memorandum of understanding, which would allow exclusive negotiations over the final terms of the deal to begin.

“For Lufthansa Group, Italy is the most important market outside of its home markets and the U.S.,” the airline said in a statement. “Italy’s importance for both business and private travel lies in its strong export-oriented economy and status as one of Europe’s top vacation spots.”

Lufthansa Group CEO Carsten Spohr has previously called the group the “natural home” for ITA.

The bid is a change of fortune for Lufthansa. In August, the previous Italian government selected a bid by private equity firm Certares and including commercial agreements with Air France-KLM and Delta Air Lines for ITA. However, the new government of Italian Prime Minister Giorgia Meloni failed to reach a deal with the Certares-led group before the exclusivity period expired on October 31. Air France-KLM has since shifted its takeover interest to TAP Air Portugal.

ITA replaced Alitalia as Italy’s national carrier in October 2021.

Southwest Airlines will pay a dividend to its shareholders of record as of January 10, 2023. This may not seem like a notable move for a carrier that has paid dividends for most of 50-plus year existence but it is: Southwest will be the first U.S. airline to resume shareholder returns since the pandemic.

Shareholder returns, including dividends and stock buybacks, were barred at any airline that took federal aid under the U.S. CARES Act until this September. Most carriers have also returned to profitability on the back of strong travel demand. Dallas-based Southwest made a $277 million net profit in the third quarter.

Other U.S. carriers may not be far behind Southwest. Alaska Airlines Chief Financial Officer Shane Tackett said in October that the carrier’s management would discuss the possibility of resuming “potential shareholder returns” with Alaska’s board in November. There is no word yet on any decision from the Seattle-based carrier.

U.S. airlines, including Southwest and Alaska, are seeing strong travel demand into the new year. Delta Air Lines CEO Ed Bastian in October went as far as to claim that travel is “countercyclical” to the macroeconomic trends of high inflation and a potential U.S. recession.

Airlines practice of giving some cash back to shareholders was in the spotlight when the industry was pushing for federal relief in the CARES Act. Some noted that, had the industry not paid dividends our bought back shares in the years prior to the crisis, they may not need the government hand out. Airlines pushed back on this claim, rightly arguing that such returns were standard practice across businesses and not just airlines.

Southwest will pay its investors an $0.18 per share dividend for the fourth quarter on January 31, it said Tuesday. The carrier estimates the dividends will total roughly $428 million.

It’s not often that travelers have something to look forward to at Newark Liberty International Airport. The new $2.7 billion Terminal A will open in December, the latest in a series of major airport projects opening around the U.S. this year.

The first 21 gates of the 33-gate facility will open on December 8, officials said Tuesday. The remaining gates open in 2023. Air Canada, American Airlines, JetBlue Airways, and United Airlines will operate from the terminal initially, and Delta Air Lines will join them next year. The old Terminal A, which opened in 1973, will be demolished.

The last new terminal to open at Newark airport was Terminal C in 1988.

United, which has a large hub at Newark, will use up to 15 gates in the new Terminal A. The airline plans to operate flights to around 23 destinations — including to Atlanta, Austin, Dallas-Fort Worth, Nashville, Raleigh-Durham, San Diego, and Seattle-Tacoma — from the facility, Newark Chief Pilot Captain Fabian Garcia said in September.

The new terminal at Newark is the latest in a series of big airport investments around the U.S. this year. New or expanded facilities at Denver, Los Angeles, New York LaGuardia, Orlando, Phoenix Sky Harbor, Seattle-Tacoma, and Washington Dulles airports have all opened in recent months.

Construction of Terminal A at Newark began in 2018.

Joby Aviation has delayed the introduction of its new electric air taxi by about a year to 2025, as the certification of the new aircraft proceeds slower than hoped. The developer disclosed the delay in a letter to shareholders on Wednesday.

The delay has immediate implications for Delta Air Lines, which in October unveiled plans to launch a premium air taxi product with Joby in 2024. Delta will sell and market the flights on what are officially known as electric vertical takeoff and landing (eVTOL) aircraft, while Joby manages operations and branding under the exclusive partnership. The airline will invest up to $200 million in the air taxi company and be its sole partner on the new premium service for at least five years after commercial launch.

“The new timeline helps clear the air with some cautious optimism that the FAA expects to have necessary [regulations] in place by” the end of 2024, Raymond James analyst Savanthi Syth wrote Thursday on the delay.

Joby, and other companies in the urban air mobility sector, claim that electric air taxi technology will revolutionize how people get around cities. In their partnerships with airlines, they tout fast, carbon-free rides on the battery-powered aircraft from downtowns or regional centers to airports. All of the in-development eVTOLS seat only four passengers and are able to fly no more than about 150 miles on a single charge.

JetBlue Ventures is also an investor in Joby, though its parent JetBlue Airways has yet to specify an order or operational plan for the air taxis in its network. Joby also counts Japan’s All Nippon Airways among its customers.

Air travelers in the U.S. now have a one-stop shop when it comes to knowing what airlines will provide them with in the event of a lengthy flight delay or cancellation.

The new Airline Customer Service Dashboard by the Department of Transportation is designed to “ensure the traveling public has easy access” to airline commitments in the event of a disrupted trip, the regulator said Thursday. The commitments, which are largely a list of existing airline policies compiled together in one place, only apply to “controllable” events, or one where the airline is at fault, for example staff shortages.

“Passengers deserve transparency and clarity on what to expect from an airline when there is a cancelation or disruption,” U.S. Transportation Secretary Pete Buttigieg said. “This dashboard collects that information in one place so travelers can easily understand their rights, compare airline practices, and make informed decisions.”

For example, if a travelers flight is delayed more than three hours due to a mechanical problem with the aircraft, the dashboard shows that they are guaranteed a meal voucher on almost all major airlines except Allegiant Air. However, if their flight is cancelled, only American Airlines, Delta Air Lines, Hawaiian Airlines, JetBlue Airways, and United Airlines will rebook them on another carrier.

“Carriers welcome opportunities to simplify travel policies, clarify existing practices and increase transparency for travelers,” a spokesperson for trade group Airlines for America said.

The new dashboard follows a spike in flight delays and cancellations earlier this year that resulted in a blame game between airlines and authorities. While acknowledging their own staffing issues, airlines have claimed that air traffic control staffing has exacerbated the situation while the DOT has argued that the situation is primarily the fault airlines and weather. Whatever the reason, the regulator has moved to improve airline passenger protections, including a new rule that would guarantee cash refunds.

The U.S. air transportation sector added 6,800 jobs in July as the airline industry continues to staff up from Covid-19 pandemic lows.

The pace of hiring slowed from June when the sector, which includes airlines as well as others, added 11,000 new employees, according to new data from the U.S. Bureau of Labor Statistics released Friday. Air transportation companies employed 567,900 people at the end of July, an 8 percent increase from July 2019, before the pandemic hit.

Airlines have struggled with staffing, from pilots on down to airport ground crews, as travel has rebounded dramatically in the U.S. While most carriers say they now have the staff they need, onboarding new employees has created its own challenges.

“The chief issue we’re working through is not hiring but a training and experience bubble,” Delta Air Lines CEO Ed Bastian said in July. At the time, the airline had “thousands in some phase of hiring and training process.”

Training bottlenecks aside, U.S. airlines are still struggling with hiring skilled staff — particularly pilots and maintenance technicians. The pilot shortage is primarily hitting smaller airlines, like Republic Airways and SkyWest Airlines, with few expecting the situation to completely ease for several years due to the long lead time training and certifying new cockpit crew members.

The July Fourth holiday in the U.S. kicks off with this week with vacationers expected to begin hitting the road en mass on Thursday. That’s when an estimated up to 2.7 million daily travelers are expected to take to the sky with a robust 12.9 million flyers over the entire long weekend, according to a new forecast from Hopper.

To put the numbers in perspective, the U.S. Transportation Security Administration’s (TSA) busiest day to date since the beginning of the pandemic was June 26 when agent’s screened 2.46 million people. Hopper’s estimate sees almost another 300,000 flyers traveling through airports across the country on Thursday and Friday, and an average of 2.6 million daily over the long weekend — or the five days from June 30 to July 4 — even as airlines and airports are already struggling with the surge of summer travelers.

“With flight delay and cancelation rates well above 2019 averages, travelers should prepare for potential disruptions traveling over the long weekend,” Hopper said. However, with many airlines proactively cancelling flights ahead of time, the number of delays has decreased in recent days.

The busiest airports are of no surprise: Atlanta, Dallas-Fort Worth, and Denver — mega-hubs for Delta Air Lines, American Airlines, and United Airlines, respectively — top Hopper’s list. Los Angeles is also forecast among the busiest.