Delta Airlines and its pilot union last year reached a tentative agreement concerning an updated four year contract. This agreement occurred about seven months prior to the existing contract would be amenable, and most believed Delta was in a strong position to continue its history of friendly labor relations. That all fell apart when the Delta pilots rejected the tentative agreement by a margin of 65% to 35%. For many of the pilots, the problem was the contract reduced profit-sharing payouts, despite raising salaries more than 21% over the course of three years.

According to those familiar with the situation, Delta and its pilots union are further away than ever from finalizing a deal. The two sides recently filed for mediation, which was a requirement of the previous contract, and now federal mediators will attempt to coax both sides into compromising and creating a new deal.

Overall, there is a US airline pilot shortage and many airlines are facing a wave of mandatory retirements of their pilots. Federal safety regulations are also making it more expensive for aspiring pilots to earn their certifications. This combination of occurrences is driving pilot wages higher and higher. Delta competitors American Airlines and United Continental have both recently agreed to new contracts that included significant pilot salary increases, making Delta the lowest paid of all three pilot teams, but that does not include Delta’s profit sharing plan – something not offered by American Airlines.

Following the rejection of the Delta contract offer, the pilots union made a counterproposal at the end of 2015 that included a 22% pay increase and two 7% annual raises. By 2018, under this plan, pilots would receive an overall increase of nearly 40%.