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United Airlines Pilots Secure Substantial Pay Raise In New Labor Agreement

Industry-wide pilot shortage strengthens negotiating power, leading to significant wage increases.

United Airlines Holdings Inc (NASDAQ: UAL) and its pilots have reached a labor agreement with a substantial pay raise. 

What HappenedAccording to the new four-year agreement, the pilots will get a cumulative 34.5% to 40.2% increase in pay raises, Reuters reported. 

Due to a shortage of pilots in the industry, United pilots gained increased leverage in negotiations. Despite high inflation, consumers have continued to spend on travel, exacerbating the issue.

The Air Line Pilots Association (ALPA), representing approximately 14,000 pilots at United Airlines, announced that they reached a tentative agreement with management. The agreement includes significant updates to pilot compensation and improvements in quality of life, vacation and other benefits.

Last year, United pilots turned down a deal that included more than 14.5% in cumulative wage increases and enhanced overtime and training pay.

“We’re pleased to have reached an agreement with ALPA,” United Airlines CEO Scott Kirby said. “The four-year agreement, once ratified, will deliver a meaningful pay raise and quality of life improvements for our pilots while putting the airline on track to achieve the incredible potential of our United Next strategy.” 

LOS ANGELES, CALIFORNIA – MAY 12: United Airlines pilots hold signs in front of the United Airlines terminal of the Los Angeles International Airport during a protest on May 12, 2023 in Los Angeles, California. PHOTO BY I RYU/VCG/GETTY IMAGES 

Following the recent ratification of a new contract at Delta Air Lines, Inc (NYSE: DAL), which offers substantial pay and benefit increases totaling over $7 billion, industry experts have considered it a benchmark for contract negotiations in North America. American Airlines Group Inc (NASDAQ: AAL) also reached a labor agreement in May.

With United, Delta, American Airlines and Southwest Airlines Co (NYSE: LUV) projected to hire approximately 8,000 pilots this year, the demand for pilots remains high, Reuters reported.  

Over the past two years, unions in various industries, including aerospace, construction, airlines and rail, have rejected initial management offers in pursuit of higher wages amidst a competitive labor market.



Produced in association with Benzinga

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