New York: United Airlines Holdings pilots approved a new four-year contract that is the costliest ever at a US carrier, providing a cumulative increase in total compensation of as much as 40.2 per cent over the life of the agreement.
The contract, with $10.2 billion in value over the four-year term, leaves Southwest Airlines alone among the four biggest US carriers without a new post-pandemic pilot accord. The United agreement was approved by 82 per cent of those voting, the Air Line Pilots Association said Friday. More than 97 per cent of all United aviators cast ballots.
United rose much as 1.6 per cent after the news. Shares pared gains to fall 0.5 per cent to $42.10 at 1:24 pm in New York.
United pilots join counterparts at Delta Air Lines and American Airlines Group in using an industrywide shortage of aviators as leverage to secure their first post-pandemic contracts with not only notable pay raises, but multiple changes to improve scheduling and work-life balance. The new United contract includes $1.7 billion in new policies that affect quality of life, such as increased profit sharing and improved pay during training, the union said.
“The journey that brought us to this day was long, difficult, and not without turmoil and upheaval,” Garth Thompson, chairman of the ALPA unit at United, said in a statement. “However, the journey also reinvigorated our union, reminding us of what we can accomplish through involvement and resolve.”
The multibillion dollar agreement will boost United’s costs and be the most expensive ever for an airline labor agreement. Pilots will get an immediate pay boost of 13.8 per cent to 18.7 per cent upon signing the deal, followed by annual increases of as much as 5 per cent. More than 200 improvements in the contract, including pay hikes, are immediate, the union said.
“We are the largest and best airline in the world because of our people, and I’m happy to give them a great contract,” CEO Scott Kirby said about the vote in a post on LinkedIn.com.
Total compensation, including retirement and other benefits, will increase between 34.5 per cent and 40.2 per cent depending on aircraft flown. Hourly pay for a 12-year captain flying the largest aircraft would rise to $428.56 in 2027, from $313.10 now.
Labor and fuel compete to be the largest cost for airlines. A series of new agreements has pushed salaries, wages and benefits to the top spot, accounting for 44 per cent of total costs, Conor Cunningham, a Melius Research analyst, said in a recent report.
