American Airlines Boosts Pilot Contract Offer by $1 Billion

By Tom Ozimek

American Airlines has sweetened its new pilot contract by over $1 billion to match a preliminary deal reached between rival United Airlines and its aviators last week.

American said Friday that the overall proposed four-year contract value has been raised to $9 billion.

The airline added that it would match the pay rates and retroactive pay in United’s tentative agreement that was reached July 15 and provide extended sick leave and increased life insurance.

Announcement of the proposed deal comes after Ed Sicher, president of the Allied Pilots Association (APA), a union that represents some 15,000 American Airlines pilots, warned in a message Thursday that he feared the carrier might “attempt to lowball us again with another subpar offer.”

Mr. Sicher said he had spoken with American Airlines CEO Robert Isom and met with Executive Vice President and Chief Strategy Officer Steve Johnson after United struck a deal to demand better terms in light of the fact that the “bargaining landscape” had changed.

Under pressure from a shortage of pilots across the industry, American Airlines agreed.

More Details

Mr. Sicher said in a July 21 statement obtained by The Epoch Times that the new proposal includes a range of measures aimed at providing competitive compensation and enhancing benefits for the airline’s pilots.

One significant aspect of the offer is the “snap-up” provision, which automatically adjusts or “snaps up” the pay rates of American Airlines pilots to match those of rivals Delta and United.

The proposed contract also includes accelerated future wage increases scheduled to take effect every Jan. 1, while also offering a ratification bonus of 21 percent.

In terms of retirement benefits, the contract offer features a 401(k) acceleration, which aims to increase contributions and vesting by January 2024.

The proposal addresses concerns about international travel compensation by increasing the international override rates to $7 for domestic flights and $5 for international flights.

Additionally, per diem rates will see an increase to $2.85 for domestic flights and $3.40 for international flights, aiming to better cover expenses while on duty.

The proposal also offers incentives for reserve pilots, including a “show, no go” pay increase to 5 hours.

In terms of health protections, the contract offer includes an extended sick leave bank pre-loaded to 120 hours, with an additional accrual of 4 hours per month.

The contract offer also seeks to increase life insurance coverage to $750,000 for all pilots, regardless of their age.

Mr. Sicher said that a ratification vote for the tentative agreement has been scheduled to run from July 24 to Aug. 7.

Union leadership will weigh “whether management’s comprehensive proposal is worthy of a membership vote,” Mr. Sicher told pilots in his message.

United Deal

On July 15, United and its pilots reached a labor agreement that includes significant pay increases, after the union rejected an earlier offer last year.

The pilots will get a cumulative 34.5–40.2 percent increase in pay raises in a new four-year contract, the Air Line Pilots Association (ALPA) said.

ALPA represents about 14,000 pilots at the Chicago-based carrier. It said it reached an agreement in principle with United management, which includes substantial improvements to compensation, as well as advancements in quality of life, vacation, and other benefits.

“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,” he added.

The United deal came months after Delta pilots ratified a new contract that includes over $7 billion in cumulative increases in pay and benefits over a four-year period.

Some industry analysts have said that the Delta contract has become the new industry benchmark for contract negotiations in North America at a time when pilots are in short supply and the overall U.S. labor market remains tight.

Reuters contributed to this report.