Why Delta Air Lines’ $1.6 Billion Bonus Payout To Employees Is A Smart Business Decision

Why Delta Air Lines’ $1.6 Billion Bonus Payout To Employees Is A Smart Business Decision

Delta Air Lines CEO Ed Bastian announced that he will pay his employees a record-setting $1.6 billion on Valentine’s Day.

In this bonus bonanza, Delta will be showing the love to about 90,000 employees. The airline has been doing well financially and has produced six consecutive years of solid profits. During this period, the company paid out $1 billion or more in profit-sharing bonuses to its workers each year. This year’s bonus will work out to about two months of pay, almost a 17% increase in compensation. According to a company spokesperson, the profit-sharing bonus is in addition to a 401(k) matching plan and other benefits.

Bastian was initially worried about paying out such large bonuses. He feared that Wall Street and investors would prefer paying his employees less money and use the funds for other revenue-generating opportunities. The chief executive said, “For years, I would get beaten up by Wall Street. They thought the profits were theirs, and ‘Why are you giving the profits away to the employees?’” Bastian added, “Wall Street has actually come full circle, and they realize that Delta is the most awarded airline in the world because of its employees.” For the third year in a row, Delta has been anointed the No. 1-ranked U.S. airline by the Wall Street Journal.

It is a wise business decision for the company to invest in its employees. When people are paid well, respected and appreciated, they tend to work harder and produce better results. They’re happier and it shows in their work and in their interactions with customers. The extra bonus compensation instills employee loyalty and will help retain employees in a tight job market. It will also make Delta more competitive in attracting top talent to join the company.

It’s prudent business practice to have upbeat flight attendants who lavish goodwill and attention on the passengers. You want to be on a plane that has pilots, mechanics and support staff who are taken care of financially. It’s good marketing as the goodwill felt by the workers leads to satisfied customers who will return and recommend Delta to their family and friends. The profit-sharing bonuses are an investment in the future of Delta. The press attention alone will generate new business for the airline.

Source: Forbes

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