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American Matches Proposed United Pilot Contract in New Update
One week after United Airlines reached an Agreement in Principle (AIP) for a new $9 billion contract with its pilots, American Airlines has updated its own proposal to match United’s offer. American’s updated proposal added over $1 billion to the contract it proposed this Spring.
American’s new contract matches the pay rates, backpay, sick time, life insurance, and other benefits offered to United pilots, per American Airlines CEO Robert Isom. American’s pilots will begin voting on the updated deal on Monday.
Captain Ed Sicher, the President of the Allied Pilots Association, the union that represents American Airlines pilots, said union leadership will weigh “whether management’s comprehensive proposal is worthy of a membership vote.”
“We’ll return to the bargaining table and do what’s necessary to get to a deal. It just won’t be done quickly,” Isom said. “We run a complex business and any changes to what we agreed to — even small ones — may have a profound impact. Reconsideration of all of these items would take time.”
Industry-Wide Pilot Contracts
American was the second legacy carrier in the United States to propose a new contract to its pilots. Across the board, airline pilots have been fighting for years to win new contracts with their companies, but the Covid-19 pandemic gave pilots extra leverage to pressure airlines for more.
Delta Air Lines pilots approved what was at the time an industry-leading deal in March. That gives unions at American, United, and other major carriers additional bargaining power they could use to set the bar for what their own contracts should have been. American proposed pilots a new contract in the spring, and pilots were set to vote on the contract over the summer.
However, after United’s recent contract proposal outdid American’s, company management went back to the drawing board out of fear the pilots would reject the contract by comparing it to United’s. Just after United’s agreement was announced, the Allied Pilots Association called on management to “meet the new industry standard” if it wants the contract to be approved by pilots.
By bringing its own proposal close in line to what United is offering, American makes it more likely that the proposal will be approved after all. If that happens, it will be years before the union will need to resume negotiation on what yet another contract might look like.
Pilots’ Bargaining Power
The covid-19 pandemic has given pilots tremendous power to put pressure on airlines for massively-improved contracts. Airlines from the smallest regional airlines up to the biggest airlines in the country have seen pay hikes over the past year.
However, what bargaining power will look like when contracts are up next is still to be seen. Over the next few years, the aviation industry will continue to not only recover from the pandemic but surge forward. United, in its own right, has added a significant number of long-haul flights in 2023, and the company has not shown any signs of slowing its expansions down.
If such expansions continue, not only at United but at all other airlines, pilots will likely continue to have significant power in determining new contracts. How airline management will respond to continued pressure from pilots has yet to be seen, and the relative power pilots have next time to make another significant jump in compensation might not be as great assuming there is not another catastrophe to upend the industry and put pilots and airlines under pressure.
The big three US airlines each, in some form or another, rank as the world’s biggest airline. The Allied Pilots Union represents 15,000 pilots at American Airlines alone. Thus, they have tremendous power to set larger trends around the world in how other airlines pay flight and cabin crew. We have seen with these waves of pilot contracts that the actions of any one of the big three and their pilots have significant implications for the other two and other major airlines in the United States and around the world.
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