United Airlines Holdings Inc. pilots approved a new four-year contract that is the costliest ever at a U.S. carrier, providing a cumulative increase in total compensation of as much as 40.2% over the life of the agreement.
The contract, with $10.2 billion in value over the four-year term, leaves Southwest Airlines Co. alone among the four biggest U.S. carriers without a new post-pandemic pilot accord. The United agreement was approved by 82% of those voting, the Air Line Pilots Association said Friday. More than 97% of all United aviators cast ballots.
United pilots join counterparts at Delta Air Lines Inc. and American Airlines Group Inc. in using an industrywide shortage of aviators as leverage to secure their first post-pandemic contracts with not only notable pay raises, but multiple changes to improve scheduling and work-life balance. The new United contract includes $1.7 billion in new policies that affect quality of life, such as increased profit sharing and improved pay during training, the union said.
"The journey that brought us to this day was long, difficult, and not without turmoil and upheaval," Garth Thompson, chairman of the ALPA unit at United, said in a statement. "However, the journey also reinvigorated our union, reminding us of what we can accomplish through involvement and resolve."
The pilots also benefited from the fact they were all negotiating at the same time, allowing them to push for similar terms in some areas.
The multibillion dollar agreement will increase United's costs and be the most expensive ever for an airline labor agreement. Pilots will get an immediate raise of 13.8% to 18.7% upon signing the deal, followed by annual increases of as much as 5%. More than 200 improvements in the contract, including pay increases, are immediate, the union said.
"We are the largest and best airline in the world because of our people, and I'm happy to give them a great contract," Chief Executive Officer Scott Kirby said about the vote in a post on LinkedIn.com.
Total compensation, including retirement and other benefits, will increase between 34.5% and 40.2% depending on aircraft flown. Hourly pay for a 12-year captain flying the largest aircraft would rise to $428.56 in 2027, from $313.10 now.
Labor and fuel compete to be the largest cost for airlines. A series of new agreements has pushed salaries, wages and benefits to the top spot, accounting for 44% of total costs, Conor Cunningham, a Melius Research analyst, said in a recent report.