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American Airlines Group stock rose after pilots ratified a new four-year contract that immediately boosts pay by 21%.
The union representing 15,000 pilots said the new contract, which also boosts 401(k) retirement plan contributions, will raise overall pay by 46% over the next four years, or $9.6 billion, compared with their prior agreement. The carrier sweetened its offer after an earlier proposal fell through.
American
(ticker: AAL) joins
United Airlines Holdings
(UAL) and Delta Air Lines (DAL) in raising pilot pay. The new contract also includes changes in scheduling and benefits sought by the union as carriers try to overcome the challenges of emerging from pandemic shutdowns amid surging customer demand.
“The pilots of American Airlines have spoken: It’s time to move forward with a new working agreement that provides substantial monetary gains and quality-of-life improvements,” said Capt. Ed Sicher, the president of the Allied Pilots Association.
American’s CEO Robert Isom said, “This agreement will help American immediately expand our pilot training capacity to support under-utilized aircraft and future flying and provide our pilots with more opportunities to progress in their careers.”
American shares rose 0.8% on Monday, while the
S&P 500
rose 0.7%.
Carriers have been under pressure amid employee shortages, including pilots, and union demands for higher pay and improved working conditions. An earlier offer from American fell through after United pilots agreed to a deal in July that raised pay by as much as 40%, or $10 billion, over four years.
The pilot union said Monday members voted 73% to approve the American contract, with 95% voting.
Pilots for Delta agreed to a contract this spring that raises pay by 34% over four years.
Southwest Airlines
(LUV) is the last of the four major carriers to have yet to reach at least a preliminary agreement with pilots. It began negotiations in March 2020, later than the others.
Write to Liz Moyer at [email protected]
Read the full article here
