United Airlines and the union representing its pilots said on Saturday they reached an agreement on a contract that will raise pilots’ pay by up to 40% over four years.
The union valued the deal at around $10 billion. This followed more than four years of tumultuous negotiations that included picketing and discussions of a strike vote.
The deal reflects the leverage being enjoyed by labor groups, especially pilots, as airline revenues soar on the back of a strong travel recovery.
The Air Line Pilots Association said the deal, which is subject to a ratification vote, would put United pilots on an equal footing with their Delta Air Lines counterparts, who have approved a pay rise agreement earlier this year.
The union said the agreement includes substantial increases in wages, pension benefits and job security.
At least on the pay front, the deal looks a lot better than the one United drivers rejected last November.
Once the deal is approved, the pilots will receive immediate pay increases of 13.8% to 18.7%, depending on the type of plane they fly, followed by four smaller annual increases, according to a summary on the union website.
Over the course of the contract, pilot compensation would increase from 34.5% to 40.2%.
Garth Thompson, president of the United Pilots Union, called it a “historic deal” made possible by the determination of the 16,000 pilots.
In a statement on social media site LinkedIn, CEO Scott Kirby said: “We have promised our world-class drivers the cutting-edge contract they deserve, and we are delighted to have reached an agreement with ALPA to this subject.”
American Airlines pilots are set to begin voting July 24 on an offer that includes four-year average cumulative increases of 41.5 percent. Southwest Airlines pilots are still negotiating. American and Southwest have independent unions, while Delta and United pilots are represented by ALPA.
Unions believe they are in a strong position to negotiate with airlines, which have taken $54 billion in federal aid to help weather the pandemic, which is booming due to a surge in travel. The number of people traveling to the United States is roughly back to pre-pandemic levels.
This week, Delta reported a record quarterly profit over $1.8 billion and record revenues during the April-June period that includes the early part of the summer travel season. United is expected to report results on Wednesday, and analysts expect the airline to post a profit of more than $1.3 billion, according to a FactSet survey.