American Airlines pilots reach tentative agreement on a new contract

CHICAGO (Reuters) – Pilots for American Airlines (AAL.O) have agreed in principle to a new contract that will increase their pay by 21 percent in 2023, ahead of a busy summer travel season years later, sources told Reuters on Friday. Negotiations with the largest US airline.

The Allied Airmen’s Association (APA), which represents more than 13,000 Texas-based American pilots, said Friday it would move forward with completing contractual language before submitting the contract to its board for approval.

However, the union did not share details of the contract.

American did not specify the value of the contract, but said it offers wage and profit sharing to match the top of the industry with quality-of-life provisions.

Under the initial agreement, American pilots will get a 21% pay rise in 2023, a 5% pay increase in the second year and 4% annually for the next two years of the deal, according to three sources familiar with the matter. .

The sources said the contract lasts four years, with pay rates similar to those earned by Delta Air Lines (DAL.N) pilots.

The sources, who spoke on condition of anonymity because details have not yet been made public, added that the pilots will also receive an additional 3% raise in 2027 when the proposed contract becomes adjustable.

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

The previous contract was renewed in 2020. Last year, the Flyers turned down an offer that included a 19% salary increase over two years.

Industry officials say the Delta pilot contract has become the new standard for contract negotiations in North America. It is fueling demands for higher wages at Canadian airlines, whose pilots want to narrow the pay gap with their American counterparts.

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

The Delta pilots in March ratified their contract, which includes more than $7 billion in cumulative pay and benefits increases over four years.

It underscores pilots’ bargaining power as airlines scramble to add staff numbers ahead of what is shaping up to be a busy summer travel season.

It’s estimated that American, Delta, United Airlines (UAL.O), and Southwest Airlines (LUV.N) employ about 8,000 pilots this year.

Analysts at Jefferies estimate that the United States has a shortfall of about 10,000 pilots. This supply and demand gap is expected to persist until 2027.

(Reporting: Rajesh Kumar Singh and Alison Lampert) Editing by Nick Zieminski

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