American Airlines, Pilots Union Reach Labor Deal
The pilots union at American Airlines has agreed to put up for a vote a five-year contract proposal that would boost pay by more than 26 percent and offer smaller raises in later years.
The board of the Allied Pilots Association agreed late Saturday, just before a midnight deadline set by the company, to accept the basic terms of the deal before the offer was pulled and negotiations moved to arbitration.
The proposal's language must be completed and voted on by pilots, according to a statement on the union's website.
"Our goal was to conclude negotiations promptly and deliver the best possible result for our pilots," the statement said.
American Airlines Group Inc., based in Fort Worth, Texas, is pushing to reach agreements with its labor unions as part of its 14-month effort to combine operations with merger partner US Airways. American CEO Doug Parker issued additional 4 percent raises last month to unions that had already accepted labor deals and offered to sweeten its offer to pilots by that much if they agreed to a deal by Saturday.
Airline profits have been soaring to record highs in recent months because planes have been packed and the price of jet fuel - airlines' biggest expense - has plummeted along with the global price of crude oil.
The deal, including the 4 percent sweetener, would increase pilot pay by 23 percent retroactive to Dec. 2 if pilots agree to the deal by mid-January. Pay would increase by an additional 3 percent as of Jan. 1 of this year, and be followed by annual 3 percent raises through 2019. It would cover 15,000 American and US Airways pilots.
"We are pleased our pilots will have a chance to vote on a contract that provides an immediate 23 percent pay increase and recognizes their contributions at American," Casey Norton, an American spokesman, said in a statement Sunday.
The company says the deal would mean American pilots would be paid 7 percent more on average than rival Delta Air Lines pilots.