DALLAS — American Airlines’ pilots union has landed a new $9 billion contract after United Airlines pilots secured a deal that set new industry standards for pay and other benefits.
The new deal matches pay increases at United and includes a ratification bonus, among other benefits like extended sick bank, increased life insurance and a medical privacy clause. The future wage increases were also pushed to take effect every January 1, matching its competitor. Chicago-based United Airlines reached an agreement in principle with its company, raising pay by up to 40% over four years this month.
The revised deal adds about $1 billion in costs for American over the four-year contract.
The board of the Allied Pilots Association, which represents American’s 15,000 pilots, will determine “whether management’s comprehensive proposal is worthy of a membership vote,” according to a memo sent to pilots from Ed Sicher, president of the Allied Pilots Association. The union was prepared to open voting on its tentative agreement to members on July 24.
“I’m really proud of the agreement our negotiating committees reached and APA’s board approved for a ratification vote, but the United deal changed the landscape,” said Robert Isom, CEO of American Airlines to pilots on Friday. “The United TA includes wages that are higher than those in our TA and additional retro pay.”
This week, American reported a record total revenue of $14.1 billion in its second quarter, the highest quarterly revenue in the airline’s history. Under the new deal, airfares could go up at American, but that’s the same story with every major airline readying for new pilot contracts with similar wage increases.
Isom reiterated to pilots that he plans to maintain a target of an August ratification and have a “new quality of life” to pilots by Labor Day.