Atlanta-based Delta Air Lines paid out hefty bonuses to its employees through their profit-sharing program on Valentine's Day. As per the airline’s release, the employees are set to receive a check for 10.4% of their earnings, which is more than a month's pay. The total disbursement amounts to about $1.4 billion, more than double what it paid the employees a year ago.
All Delta employees below mid-level managers, or over 100,000, participate in the program. Thus, the average profit-sharing payment comes to about $14,000 for each Delta employee. According to CNN, several airlines struggled to keep up with staffing issues, but as travel has picked up in recent times, with millions of customers flying, airlines have pocketed huge profits.
What Is a Profit-Sharing Plan?
A profit-sharing plan gives an employee a share in the company's profits. It is also referred to as a deferred profit-sharing plan (DPSP), and the payout depends on the annual or quarterly earnings of the company.
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These plans became more common in the airline industry after a series of bankruptcy filings and money-losing years. Unions agreed to the profit-sharing plans as a way to recoup the losses borne by their members. Companies generally prefer the compensation being tied to profits as it limits labor costs during years when a company is struggling financially.
Last year, Singapore Airlines paid its staff a bonus of around eight months' salary after posting record annual profits during the pandemic. The airline’s eligible staff received a profit-sharing bonus equivalent to 6.65 months' pay, in recognition of their hard work and sacrifices during COVID-19.
While Delta is primarily non-union, it has the most lucrative profit-sharing plan in terms of the percentage of profits paid to employees. However, some of Delta’s employees, around 18,500 pilots are unionized. However, they are entitled to the same profit-sharing ratio as the non-union employees.
Delta’s Profit Sharing History
As per a Washington Times report, this is the second largest profit-sharing payout by Delta, following its record $1.6 billion payout in 2019. That year, the bonus was roughly equivalent to two months of pay per employee. Furthermore, the company release stated that the payout marks an important milestone for the program, and since the inception of the program in 2007, the airline has paid out about $11 billion to its employees.
Last year, Delta had a whopping $58 billion in revenue, which is reflected in the payout, as it is up by 146% from the profit-sharing payment of a year earlier and well above the $108 million for 2021.
In 2020, there was no profit sharing due to record losses experienced by the airline due to the plunge in demand for flying during the first year of the pandemic. This year, however, the profit-sharing distribution is spread across the globe. While employees in Georgia received about $595 million, those in New York received about $185 million.
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Internationally, the EMEAI region received $4.4 million in payout, with the Asia-Pacific region receiving $5.4 million.
