you are exactly right. the revenue environment is strong enough that AA and DL are in something of a one-ups-manship contest to increase employee salaries and really try to force up each other's costs - as well as those of competitors.
UA and WN are the carriers most likely to be hurt in the process and that is not lost on either AA or DL's mgmt.
AA is very aware of the increased competition from WN and would love to do nothing more than force WN's costs up or at the least create employee dissatisfaction at WN because the gap between WN and legacy carrier employee salaries is shrinking.
UA is making a lot of changes to its network but in general is reducing or limiting capacity which means they have less opportunities to spread higher employee costs over their network without pushing down their yields. So UA is in a quandary.
And of course AA and DL are in their usual hypercompetitive mode. Parker and his unions are trying to argue that his people are higher paid than DL employees, but only if DL's profit sharing is not counted (which incidentally is finalized at over 16.5% for 2014, of which 5% has been paid which means DL employees will receive gross profit sharing in Feb that is more than twice what they received last fall as the first part of their 2014 profit sharing. In fact, part two alone of DL's profit sharing payout will be larger than any other carrier and larger than in the past)
It appears that DL wants to get its pilots and likely other employee groups to roll large portions of DL's profit sharing into the base rates which AA will be forced to match as part of the JCBAs which have not included profit sharing. DL also stands to gain by forcing UA and WN salaries up.
DL's employee compensation is likely to keep going up because of higher profitability but because Parker doesn't believe in profit sharing, DL wants to increase its employees' salaries in a way that Parker is forced to increase his as well.
as for the increased cost of health care, you would do well to understand the environment throughout the US. this from Marketwatch
"Premiums for employer-sponsored coverage have been rising, averaging $5,478 in 2013 for employee-only policies, up from $3,848 in 2005. Family coverage during the same eight-year period jumped to $16,302 from $10,367, the study finds."
DL reworked its health care plans and will offer a reenrollment option - so it is a little premature to say that employee costs for DL's health care plans are out of line with the rest of the industry. We quite simply do not know at this point.
