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Aviation Industry Updates: March 7, 2023

James Onieal : Mar 7, 2023 7:58:38 AM

Industry News Export

Delta Offers Pilots 34% Pay Hike

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Pilots at Delta Air Lines have approved a new contract that will increase wages 34 percent by 2026 and includes improvements to scheduling, retirement and other benefits, raising the standard for contract negotiations underway at other large U.S. airlines.
Voting was conducted in February, and the results were announced on Wednesday, with 78 percent of pilots approving the contract, according to the union that represents them, the Delta Master Executive Council. The raises are valued at more than $7 billion over four years, the union said.
The agreement’s substantial raises are a reflection of a shortage of pilots in the United States and the strong recovery in demand for air travel. Airlines have been hiring thousands of pilots since bookings began picking up in 2021 after the pandemic gutted travel in early 2020. Many airlines offered early retirements and buyout packages to pilots and other employees during the height of the pandemic and before any vaccines became publicly available, thinking demand would recover slowly. They were left short staffed when business picked up much more quickly.
“This industry-leading contract is the direct result of the Delta pilots’ unity and resolve,” said Capt. Darren Hartmann, the chairman of the union. “Despite a two-year delay in negotiations due to Covid, we never lost sight of our goal to obtain significant across-the-board enhancements to our Pilot Working Agreement.”

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American Airlines Goes All-In On A $15 Billion Debt-Cutting Plan

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After spending around $24 billion to upgrade its fleet in the run-up to the pandemic, following a bankruptcy and the merger with US Airways, the nation’s most-leveraged carrier is halfway through its biggest ever debt-reduction program.
Two months into the job, CFO Devon May is upbeat about the carrier’s ability to generate sufficient revenue through 2025 to raise its credit standing from B- to BB, in what would be the strongest rating since the merger about a decade ago.
High costs for labor and jet fuel — not to mention the threat of a severe recession — may yet throw a wrench into the plan. But with the US economy still firing on all cylinders, profits are returning to the business, helped by diminished capacity across the airline industry and higher fares.
“What you’re going to see from us over the next decade or so is just a more balanced approach to capital,” May said in an interview with Bloomberg News.
The company is signaling a new era of budgetary restraint is a priority, against the backdrop of higher interest rates, a $12 billion capital-expenditure program through 2027 and big debt payments on the horizon in 2025.
It will also pay $2.1 billion in interest expense in 2023 using current rates and capital structure, according to an analysis by Bloomberg Intelligence. That’s up from about $1 billion in 2019.

Yahoo Finance

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Republic Sues 12 Former Trainee Pilots

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In the current climate of huge rising demand for air travel, airlines worldwide are scrambling to source more aircraft to meet that demand and, of course, pilots to fly those planes. This buoyant market for pilots has led Indianapolis-based Republic Airways, along with its associated pilot training organization, Leadership in Flight Training Academy (LIFT), to commence legal action against 12 of its former students.
Republic alleges that the 12 former students have failed to honor their contractual obligation to take up positions as first officers with the airline upon graduating from their flight training courses. Between October 6th, 2022, and January 25th of this year, Republic filed 12 separate lawsuits, each one against an individual defendant who had enrolled in Republic's LIFT Academy.
In one case, the airline states that one student received a US$20,000 tuition discount in exchange for their agreement to accept a job offer as a first officer at Republic after completing flight training. The student's enrollment agreement also included a commitment that they would work for Republic for five years of continuous employment.
In seeking restitution for the trainee's failure to fly for Republic, the carrier seeks damages for a $20,000 tuition discount plus an additional $9,700 in tuition assistance payments they received while training. The lawsuit states that the total costs of the student's training program would have been $85,000. The student is yet to respond to the legal claim formally.
In another case filed in October last year, Republic alleges that another former student owes $31,550 after they took a job for a fellow regional airline, Envoy Air, rather than fulfill their commitment to work for Republic. In this case, the defendant has filed a response to the lawsuit, claiming that Republic breached its contract with them first by failing to offer them a job in a "timely fashion."

Simple Flying

FAA Investigating Close Call Between JetBlue Flight, Learjet at Logan Airport

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