SUMMARY
- United Airlines and its pilots' union strike a preliminary labor deal, potentially leading to up to 40.2% wage growth over four years.
- The deal, valued around $10 billion, encompasses enhancements such as overtime pay, holiday pay, and improved scheduling.
- While the agreement awaits ratification from the company's 16,000 pilots, other major airlines are also negotiating similar labor agreements.
United Airlines and its pilots' union have finally seen eye-to-eye on a provisional labor agreement that might lead to a staggering pay surge of up to 40.2% over the next four years. This move signifies the end of a prolonged period of nail-biting negotiations and airport protests. Notably, this deal propels United's high-flying staff into the upper echelons of the major airlines who have successfully negotiated for better pay, in the backdrop of the surging travel demand post-pandemic.
The Air Line Pilots Association declared the initial deal on Saturday. This announcement comes in the wake of Delta Air Lines pilots' ratification of a new contract that includes 34% wage hikes over the next four years. This made them the first among the big four airlines to agree on a new pact. Similarly, American Airlines and its pilots' union brokered a new labor agreement with 40% pay raises over four years, which is still awaiting a nod from its members.
COVID-19 put a temporary brake on contract discussions throughout the industry. However, the revival of the travel demand has reignited the negotiations. Employees are now rallying for enhanced pay and improved working conditions. However, not all airlines are in smooth waters. Southwest Airlines and its pilots union have not managed to reach common ground, pushing the union towards seeking release from federal mediation, an indicator of a looming strike.
The tentative agreement that the United pilots' union speaks of is valued at an approximate $10 billion. It offers an impressive roster of improvements, such as overtime and holiday pay, and improved scheduling. Pay increments range from 34.5% to 40.2%, depending on the specific aircraft the pilot commands. Upon signing, pilots could see their paychecks balloon by 13.8% to 18.7%.
However, this contract is not set in stone yet, and requires the ratification from the company's 16,000 pilots. "We promised our top-notch pilots the leading contract they merit, and we're delighted to have achieved a consensus with ALPA," proclaimed United CEO Scott Kirby in a LinkedIn post. However, the proposal was previously rejected by an overwhelming majority last year. With United scheduled to announce their second-quarter earnings post-market close on Wednesday, the executives are likely to face scrutiny over the deal's cost in a conference call the next day.
The Allied Pilots Association, representing American Airlines pilots, confirmed that it is assessing the new United deal in anticipation of a pilot vote on its own tentative agreement in the coming weeks. Meanwhile, American Airlines refrained from making an immediate comment.
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