After a very drawn out negotiation process, American Airlines and the Allied Pilots Association (APA) have reached an agreement in principle on a new collective bargaining agreement. This follows pilots having voted to authorize a strike earlier this month.
What we know about the new American Airlines pilot contract
It has today been announced American Airlines management and the union representing pilots have reached an agreement on a new contract. It will now be up to pilots to vote on the contract, in order to ratify it. The details of the contract aren’t yet public, but we should know more very soon.
Here’s what the union had to say about this agreement:
The APA Negotiating Committee and its American Airlines management counterparts have reached an agreement in principle (AIP) on a new collective bargaining agreement.
As required by the APA Policy Manual Section 9.06, we will move forward with completing contractual language for all sections and related letters and for the implementation schedule. Once that requirement is fulfilled, the Negotiating Committee will present the AIP to the APA Board of Directors for consideration as a proposed tentative agreement (TA) at least seven days prior to any meeting convened to consider the TA.
Details of the AIP will be released by the Negotiating Committee in the days ahead.
Fellow pilots, thank you for your steadfast support throughout this lengthy process. As always, we will proceed with the best interests of the pilot group foremost in our minds.
Here’s what American Airlines management had to say about this agreement:
We’re pleased to have reached an agreement in principle on a new four-year contract with the Allied Pilots Association (APA) that provides our pilots with pay and profit sharing that match the top of the industry with improved quality-of-life provisions unique to American’s pilots. We have the best and most professional pilots in the business and like all American Airlines team members, they deserve to be paid well and competitively.
What this contract means for American Airlines
Pilots at most major airlines in the United States have been in the process of negotiating new contracts, given the pilot shortage, combined with the huge demand for travel. It’s a great time for pilots to try to secure a new contract. So far we’ve seen pilots at Alaska and Delta ratify new contracts, so it looks like pilots at American are next in line to finalize this.
I’m very curious to learn the details of this contract. Back in March, American CEO Robert Isom said the company was prepared to match Delta’s contract, and that pilots could be making up to $590K per year.
This is going to have some major implications. Delta’s new pilot contract offers $7.2 billion in incremental value over a four year period. If American pilots get similar value, that will be greater than the company’s net profits over the four year period from 2016 to 2019, which were the four most profitable consecutive years in the history of the industry.
Bottom line
American Airlines and the union representing pilots have reached an agreement in principle on a new contract. I imagine this will look very similar to Delta’s new contract, so it’s going to be costly for the airline. We should find out the details soon, but I suspect this will offer over $7 billion in value over the next four years.
I guess airlines have to hope that airfare and demand just keeps going up, or else they might have a hard time paying these wages while turning a profit.
What do you make of this development with American pilots?
