Tuesday, August 22, 2023

American Airlines pilots approve new contract that boosts compensation by more than 46%

Reuters
Mon, August 21, 2023 

An American Airlines plane sits at a gate at Logan Airport ahead of the July 4th holiday in Boston


CHICAGO (Reuters) -American Airlines pilots have approved a new contract that includes more than $9.6 billion in total pay and benefits increases over four years, reflecting the bargaining power held by pilots in an era of airline staff shortages.

The Allied Pilots Association (APA), which represents 15,000 pilots at the Texas-based carrier, said on Monday that 72.7% of the pilots voted for the deal which will result in an immediate pay raise of more than 21%.

Overall, compensation for pilots at the airline will rise by more than 46% during the contract's duration.


"It's unprecedented and historic," the Allied Pilots Association's president, Captain Ed Sicher, told Reuters on Monday.

"For pilots the biggest victory is not just the wages but the work-life stuff."

Analysts at Jefferies estimate that the U.S. airline industry has a shortage of about 10,000 pilots. This supply-demand gap is projected to last until 2027.

With no letup in travel demand, airlines are in a rush to staff up, bolstering the bargaining power of pilots.

Rival United Airlines last month announced a preliminary deal for a new four-year contract that would give its pilots a cumulative increase of 34.5%-40.2% in pay.

American's contract includes about $1.1 billion in immediate, one-time payments and ratification bonuses.

Quality-of-life improvements represent nearly 20% of the increased value of the new contract, the union said. For example, pilots would get premium pay if the company reassigns them from a trip they bid on, or have asked to fly, Sicher said.

(Reporting by Rajesh Kumar Singh in Chicago and Allison Lampert in Montreal; Editing by Matthew Lewis)


American Airlines pilots ratify a new contract that includes big pay raises and bonuses

DAVID KOENIG
Mon, August 21, 2023 

FILE - American Airlines planes are parked at Pittsburgh International Airport on March 31, 2020, in Imperial, Pa. Pilots at American Airlines have approved a new contract that will raise their pay 41% over four years. Their union, the Allied Pilots Association, said Monday, Aug. 21, 2023 that the vote was 73% in favor of ratifying the contract. 
(AP Photo/Gene J. Puskar, file) 

DALLAS (AP) — American Airlines pilots have approved a new contract that will raise their pay by more than 40% over four years and increase company contributions to retirement plans, their union said Monday.

The Allied Pilots Association said that 73% of pilots who took part voted in favor of the four-year contract, which it valued at $9.6 billion.

“This contract is a big first step toward restoring the wages, benefits, and work rules that were lost during the past two decades while our profession was under continuous assault," said union President Ed Sicher. He said pilots deserved to be compensated in line with the “tremendous amount of responsibility” they take with every flight.

CEO Robert Isom said the agreement will help American immediately expand its pilot training and provide pilots with more opportunities for career advancement.

American has about 15,000 pilots.

Airline unions are enjoying leverage to get big pay raises because a boom in travel is lifting airline revenue. Texas-based American earned $1.3 billion in the second quarter alone, helped by strong ticket sales, record revenue, and a drop in the price of jet fuel. Pilot unions have been in particularly strong position because of a shortage that is being felt most keenly at smaller carriers.

Pilots at American rejected an offer last November. They reached another agreement in late July, which was renegotiated again after United Airlines approved a tentative deal with its pilots. Pilots at Delta Air Lines won big pay raises earlier this year.

Pilots at Southwest Airlines are still in negotiations.


Wage rates for American pilots will rise at least 41% and perhaps more if United pilots ratify their agreement, according to a spokesman for the Allied Pilots Association.


The union said its new contract with American includes $1.1 billion in one-time payments and ratification bonuses and immediate pay raises averaging 21%. Annual raises, plus increased company contributions to retirement plans, will raise the value of total compensation by more than 46% over four years, according to the union.

It also includes more vacation benefits and changes designed to give pilots more predictable schedules, the union said.

Airline industry labor contracts do not expire — that's part of a federal law designed to make strikes nearly impossible. Rather, they become open for change or “amendable” at their conclusion. Bargaining on the next contract for American's pilots could begin as soon as November 2026.

American Airlines warns of higher third-quarter cost from new pilot contract

Reuters
Tue, August 22, 2023 

An American Airlines Airbus A321 plane takes off from Los Angeles International airport

(Reuters) -American Airlines warned on Tuesday it was expecting higher costs in the third quarter following a new labor deal with its pilots that included more than $9.6 billion in total pay and benefits increases over four years.

The company's pilots approved a new contract on Monday that also had provisions for retroactive pay for the first four months of 2023, leading to $230 million in added expense that will be reflected in the third-quarter results.

Continued strength in travel demand has provided pilots an upper hand in contract talks and bolstered their bargaining power as airlines rush to staff up and expand capacity.

Rival United Airlines too had last month announced a preliminary deal for a new four-year contract that would give its pilots a cumulative increase of 34.5%-40.2% in pay.

American Airlines now expects its cost per available seat mile excluding fuel and net special items to rise about 4% to 6%, compared with a prior forecast of about 2% to 4% growth.

Its contract includes about $1.1 billion in immediate, one-time payments and ratification bonuses.

The company reaffirmed its annual cost outlook, mainly due to changes in the anticipated timing of other expenses.

(Reporting by Shivansh Tiwary in Bengaluru; Editing by Anil D'Silva and Arun Koyyur)

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