American Airlines offers pilots nearly 17% raises in new contract proposal

Pilots talk while looking at the tail of an American Airlines plane.

Peter Mike | Reuters

American Airlines CEO Robert Isom said Thursday the carrier has offered its pilots pay raises totaling nearly 17% as part of a new contract, according to internal video seen by CNBC.

The latest proposal to the pilots’ union, the Allied Pilots Association, comes less than a week after rival United Airlines and its pilots’ union reached a tentative agreement that includes more than 14% of total increases in 18 months , the first major US airline in the industry to arrive at this point in the pandemic.

That deal faces a United drivers’ vote that ends in mid-July, however, and it’s still unclear whether it has enough support to pass.

Earlier this month, Isom said American would make a new offer to the carrier’s roughly 15,000 pilots once details of the deal with United are released.

His proposal includes an increase of 6% at signing, then 5% at the start of 2023 and 2024.

“United offered an industry-leading salary, and we matched it for our team,” Isom said in the video message on Thursday, referring to driver pay rates. The percentage difference is due to the higher salary of United drivers.

American’s latest proposal comes as the industry grapples with pilot shortages, especially at smaller regional airlines. At the same time, travel demand has soared, catching many airlines off guard, especially during peak periods.

Isom said American was offering further pay increases for training and a 50% bonus on redeployment, including for reserve crews. There are other incentives such as back pay if the deal is ratified by September 30, he said.

“Reaching a deal quickly will help strengthen our training program and ensure we can continue to grow,” he said.

Dennis Tajer, captain of American Airlines and spokesman for the union, said the APA was considering the proposal.

The APA’s relationship with American has been one of the most strained in the industry. The union repeatedly complained about fatigue caused by grueling schedules and other quality of life issues, such as schedule changes, issues it wanted to address in the next contract.

American pilots have been picketing to protest working conditions and the lack of progress in negotiations.

Pilots from Southwest Airlines, Alaska Airlines and Delta Air Lines also picketed for similar reasons. Delta pilots recently picketed airports across the United States on Thursday, all three are in contract negotiations.

Earlier this week, American Airlines regional carrier Envoy Air said pilots could receive triple pay for taking open trips in July, CNBC reported earlier this week.

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