American Airlines pilots tentatively reach agreement on new contract

CHICAGO, May 19 (Reuters) – American Airlines ( AAL.O ) pilots have agreed in principle to a new contract that increases their pay by 21% in 2023, sources told Reuters on Friday, ahead of a busy summer travel season. after several years. of negotiations with the largest American airline.

The Allied Pilots Association (APA), which represents more than 1[ads1]3,000 pilots at Texas-based American, said Friday it will move forward with finalizing contract language before presenting the contract to the board for approval.

However, the union did not share contract details.

American did not quantify the contract value, but said it provides wage and profit sharing that matches the top of the industry with improved quality of life.

Under the tentative agreement, U.S. pilots would get a 21% pay increase in 2023, a 5% pay increase in the second year and 4% a year during the following two years of the deal, three sources with direct knowledge of the matter said. .

The sources said the contract runs for four years with pay rates comparable to those secured by pilots at Delta Air Lines ( DAL.N ).

Pilots will also get an additional 3% raise in 2027 when the proposed contract can be changed, added the sources, who spoke on condition of anonymity as the details are not yet public.

American’s contract includes improvements to scheduling, a critical issue for pilots seeking better work-life balance in a profession that often requires them to be away for days at a time from their families, they said.

The previous contract was renewed in 2020. Last year, the pilots rejected an offer that included a 19% pay rise over two years.

Industry officials say Delta’s pilot contract has become a new benchmark for contract negotiations in North America. That is fueling demands for higher wages at Canadian airlines, whose pilots want to close the wage gap with their American counterparts.

American had estimated that matching Delta’s deal would cost it about $8 billion over four years.

Delta’s pilots in March ratified the contract that includes more than $7 billion in cumulative increases in pay and benefits over four years.

It underscores pilots’ bargaining power as airlines rush to increase staff numbers ahead of what looks set to be a busy summer travel season.

American, Delta, United Airlines ( UAL.O ) and Southwest Airlines ( LUV.N ) are expected to hire about 8,000 pilots this year.

Analysts at Jefferies estimate that the US is short about 10,000 pilots. This gap between supply and demand is estimated to last until 2027.

Reporting by Rajesh Kumar Singh and Allison Lampert Editing by Nick Zieminski

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