American Airlines (NASDAQ:AAL) pilots approved a sweetened labor deal, making the carrier the second major U.S. airline to seal a new contract with its highest-paid work group.
The more than 15,000 pilots at American will get immediate raises of 21% with compensation increasing more than 46% over the duration of the four-year contract, including 401(k) contributions, their union said Monday.
An earlier deal between American and the union fell apart after rival United Airlines and that carrier’s union reached a richer, preliminary deal. But American increased its offer last month.
American’s pilots voted more than 72% in favor of the new contract, and there was a 95% turnout, according to the Allied Pilots Association. The agreement also includes improvements in scheduling and benefits.
American said on Tuesday retroactive pay for the pilots will cost it $230 million in the third quarter. The airline raised its unit cost guidance on Tuesday to a 4% to 6% increase compared with the same period last year, up from a previous forecast of a 2% to 4% increase, maintaining its annual guidance.
Pilots have been pressing airlines for better compensation and work rules as the industry faces a shortage of aviators in the wake of the COVID pandemic.
“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,” said American CEO Robert Isom.
AAL shares docked six cents to $15.10.
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