CHICAGO, May 19 (Reuters) – American Airlines ( AAL.O ) pilots have agreed in principle to a new contract that will boost their pay by 21% by 2023, sources told Reuters on Friday, before a busy summer travel season, after years of negotiations with the US’s largest carrier.
The Allied Pilots Association (APA), which represents more than 13,000 Texas-based American pilots, said Friday it will move forward with finalizing contractual language before presenting the contract to its board for approval.
However, the union did not share details of the contract.
American did not quantify the value of the contract but said it provides pay and profit sharing that matches the top of the industry with enhanced quality of life provisions.
Under the tentative agreement, American pilots will get a 21% pay increase by 2023, a pay increase of 5% in the second year and 4% a year during the next two years of the deal, three sources with direct knowledge of the matter said. .
Sources said the contract lasts four years with pay rates comparable to those secured by pilots at Delta Air Lines ( DAL.N ).
Pilots will also get an additional 3% raise in 2027 when the proposed contract becomes amendable, added the sources who spoke on condition of anonymity because the details are not yet public.
American’s contract includes scheduling improvements, a critical issue for pilots seeking a better work-life balance in a profession that often requires them to be away from their families for days at a time, They said.
The previous contract came up for renewal in 2020. Last year, the pilots rejected an offer that included a 19% salary increase over two years.
Industry officials said Delta’s pilot contract became a new benchmark for contract negotiations in North America. This is fueling demands for higher wages at Canadian carriers, whose pilots want to narrow the pay gap with their US counterparts.
American estimated that matching the Delta deal would be worth about $8 billion over four years.
Delta pilots in March ratified their contract that includes more than $7 billion in combined pay increases and benefits over four years.
It underscores the bargaining power of pilots as airlines rush to increase staff numbers ahead of the busy summer travel season.
American, Delta, United Airlines ( UAL.O ) and Southwest Airlines ( LUV.N ) are expected to hire about 8,000 pilots this year.
Analysts at Jefferies estimate that the United States is short by nearly 10,000 pilots. This supply-demand gap is expected to last until 2027.
Reporting by Rajesh Kumar Singh and Allison Lampert Editing by Nick Zieminski
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