American Airlines increases pilot contract offer by $1 billion following United agreement

American Airlines has increased its offer for a new pilot contract by over $1 billion to match the preliminary agreement reached last week between rival United Airlines and their pilots.

The updated offer from American Airlines would raise the total value of the four-year contract to approximately $9 billion, aligning it with United’s pay rates, backpay, and other benefits such as sick leave and life insurance, according to a message from CEO Robert Isom to the pilots on Friday.

Airlines and pilot unions have been engaged in lengthy negotiations for new contracts, with unions gaining increased bargaining power in the aftermath of the Covid pandemic, which exacerbated an existing pilot shortage as travel demand rebounded. In March, Delta Air Lines pilots approved a new agreement that includes 34% pay raises over four years.

American Airlines pilots were scheduled to vote on the current deal starting on Monday. The new offer includes 21% pay bonuses and pay parity with United and Delta, as confirmed by the Allied Pilots Association, the pilots’ union, on Friday.

Captain Ed Sicher, the union president, stated that the leadership will assess “whether management’s comprehensive proposal is deserving of a membership vote.”

If the proposed changes are not approved in time for the vote, Isom confirmed that the company will resume negotiations.

“We will return to the bargaining table and take the necessary steps to reach an agreement. However, it will not be a quick process,” Isom explained. “We operate a complex business, and even minor alterations to what we have agreed upon can have a significant impact. Reevaluating all these aspects will require time.”