Southwest’s pilots union is nearing a preliminary labor agreement

Southwest Airlines and its pilots union are closing in on a new contract that would raise pay for the company’s more than 11,000 pilots and end months of contentious negotiations, weeks before the crucial holiday travel season.

The Southwest Airlines Pilots Association said in a letter to its members on Thursday that the company and union have agreed on wages, retirement and other terms but are working on a timeline for implementation.

Delta Air Lines, United Airlines and American Airlines have already terminated multibillion-dollar labor agreements with pilots this year as unions pushed for higher wages, better scheduling and other improvements after the Covid pandemic derailed contract talks.

If a preliminary agreement is approved by the Southwest Pilots Association Council in the coming weeks, it will then be sent to pilots for a ratification vote.

The union and the airline refused to provide details of the deal.

An airline spokesperson told CNBC that Southwest and the union are “working diligently to close the few remaining items.” “Southwest remains committed to reaching an agreement that rewards our pilots and positions them competitively in the industry.”

Southwest reached a tentative agreement with the flight attendants union earlier this fall that includes 36% pay increases for cabin crew members.

A labor deal with the pilots would end a period of tense negotiations between the company and the union, which recently included laying the groundwork for a potential strike, although strikes are extremely rare in the airline industry.

It will also become the latest in a series of major labor deals this year, including agreements between writers, actors and studios in Hollywood as well as between automakers and the United Auto Workers union, in the wake of the strikes.