United Airlines and the Air Line Pilots Association (ALPA) have announced an agreement on a new contract that will result in substantial pay raises for the airline's pilots. The deal, reached after over four years of negotiations, is expected to raise pilot pay by up to 40% over a four-year period.
The agreement, valued at approximately $10bn by the union, signifies the strength and leverage of labor groups, particularly pilots, in light of the airline industry's robust recovery. The resurgence in travel has led to increased revenues for airlines, giving labor unions significant bargaining power.
The ALPA stated that the agreement, which is subject to a ratification vote, will bring United Airlines pilots in line with their counterparts at Delta Air Lines, who earlier this year approved a similar pay-raising deal. The union highlighted that the agreement includes not only substantial increases in pay but also improved retirement benefits and job security.
Compared to a previous deal rejected by United pilots last November, the new agreement offers significantly better terms, particularly in terms of pay. Once approved, pilots will receive immediate wage-rate increases ranging from 13.8% to 18.7%, depending on the aircraft they fly. This will be followed by four smaller annual raises. Overall, pilot pay is set to rise between 34.5% and 40.2% throughout the duration of the contract.
Chair of the United Pilots' union, Garth Thompson, hailed the agreement as a historic milestone made possible by the unwavering determination of the 16,000 pilots. United Airlines CEO Scott Kirby expressed satisfaction with the outcome.
"We promised our world-class pilots the industry-leading contract they deserve, and we're pleased to have reached an agreement with ALPA on it," Garth Thompson stated on LinkedIn.
Meanwhile, pilots at American Airlines are preparing to vote on a contract offer that includes average cumulative raises of 41.5% over four years, starting on July 24. Negotiations between Southwest Airlines pilots and the company are ongoing. It is worth noting that American and Southwest have independent unions, whereas pilots at Delta and United are represented by ALPA.
Labor unions feel emboldened by their strong bargaining positions as airlines, which received $54bn in federal aid to overcome the pandemic's challenges, are now experiencing a boom due to the resurgence in travel. Passenger numbers in the U.S. have nearly returned to pre-pandemic levels.
Delta recently announced a record quarterly profit of over $1.8bn, along with record revenue for the April-to-June period, which encompasses the beginning of the summer travel season. United is expected to report its financial results on July 19, with analysts anticipating a profit of more than $1.3bn, as per a FactSet survey.
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