Delta Air Lines (NYSE:DAL) has announced a pay hike of 5% effective April 1, 2023, marking the second increase in one year. Previously, the carrier increased salaries by 4% in May 2022. Delta is increasing salaries at a time when airlines are struggling due to staff shortages while travel demand remains strong.
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In a memo to employees, Delta CEO Ed Bastian stated that the company is giving a 5% base pay increase for ground and flight attendants and a 5% pool for eligible merit employees worldwide. All Delta employees will be eligible for the hike, except those covered by an industry or government requirement, or a collective bargaining agreement.
The company is also paying $563 million to its employees in profit sharing later this month. Last month, Delta proposed a 34% cumulative pay increase to its pilots over three years under a new contract after pilots voted in October 2022 to authorize a strike.
Delta recently reported better-than-anticipated Q4 2022 results fueled by robust travel demand. However, the company’s Q1 2023 earnings guidance fell short of expectations. Nevertheless, Morgan Stanley analyst Ravi Shanker remains optimistic about Delta and calls it a top sector pick.
What is the Target Price for DAL Stock?
Delta Air Lines earns Wall Street’s Strong Buy consensus rating based on 12 Buys and one Hold. The average DAL stock price target of $50.54 suggests 27.7% upside potential. Shares have advanced 21% so far in 2023.
