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Latest News - January 2015

January 4, 2015
American Airlines Pilots' Pay Up 23% in Tentative Contract
Source: BLOOMBERG
By: Mary Schlangenstein

American Airlines Group Inc.’s pilots union accepted a sweetened tentative agreement that would provide an immediate 23 percent pay increase to pilots, followed by additional raises in each year of the contract.  The five-year agreement was accepted by leaders of the Allied Pilots Association and must be voted on by members after all of the language in the accord is finalized, the union said in a statement on its website late yesterday.

American wants to quickly reach new contracts so employees in each labor group have common pay scales and work rules, increasing efficiency. American had left open its final contract offer, including an added 4 percent initial pay raise, after sending the dispute to arbitration. The agreement followed two days of meetings by the union board.  “Our goal was to conclude negotiations promptly and deliver the best possible result for our pilots,” the union said in a website message to members.  American said it was “pleased” pilots would get to vote on a contract that recognizes their contributions to the airline, the carrier said in a statement. 

Pilot Salaries

“In general, American pilots weren’t doing that poorly,” said Kit Darby of Kit Darby Aviation Consulting in Peachtree City, Georgia, in a phone interview today. “This new proposal certainly sounds like it will place them at, if not the highest paid position, certainly close to it.”  The most experienced pilots of the airline’s largest aircraft are paid an annual average of $213,800, $38,000 less than their peers at Delta Air Lines Inc. (DAL), according to data compiled by Darby. Delta has the highest average experienced pilot salaries of the major U.S. carriers.

If it’s accepted by union members, pilots would get a 23 percent pay raise retroactive to Dec. 2, and a 3 percent raise on Jan. 1, 2015, followed by subsequent 3 percent increases on Jan. 1 of 2016, 2017, 2018 and 2019. The contract would cover about 15,000 pilots from American and merger partner US Airways.  American and the union didn’t provide examples of pay rates under the tentative contract. American Airlines pilots gave up $315 million a year in pay and benefits after the carrier’s November 2011 bankruptcy filing, and joined other unionized employees who made $1.6 billion in annual concessions in 2003 to help keep the airline out of bankruptcy.

Flight Attendants

The airline is trying to secure joint contract agreements with its major unions as it moves to complete the integration of the two carriers.  A contract for American flight attendants was resolved by arbitration on Dec. 13, after workers rejected a tentative contract agreement with the carrier. While the arbitrated accord reduced pay by $81 million a year compared with the rejected version, American decided to restore the lost wages on Dec. 18.

American and US Airways merged on Dec. 9, 2013, creating the world’s largest carrier. The airline wanted to avoid a repeat of a contract dispute that kept US Airways from unifying pilot groups after its 2005 merger with America West.  “Based on the speed of the negotiations and the size of the initial and annual raises, I would say that it is big win for the pilots,” Darby said. 

 

 


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