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North America

United Airlines Offer to Pilots Still Lags Competitors: Union

Edward Russell

April 4th, 2023

A line of United jets at the Denver airport

United Airlines and its pilots union, the Air Line Pilots Association, remain at odds over pay rates in a new contract, even as talks drag in the face of progress at many of the carrier’s competitors.

“The points of disagreement are largely economic,” the negotiating committee at the United chapter of ALPA told pilots in a memo Monday viewed by Airline Weekly. “The degree that they lag our competition is a gap we must close.”

The committee added that, while the airline has agreed to improvements on many items of disagreement, their offer still “trail our peers.”

“We continue to work with the Air Line Pilots Association to reach an industry-leading labor agreement for our world-class aviators,” a United spokesperson said. Over the past few months, executives at the airline have mostly declined to comment on the talks in order to “respect” the negotiating process.

Pilots at Delta Air Lines ratified a new four-year contract that includes roughly $7 billion in economic value for pilots, including 34 percent pay increases, on March 1. The accord has already set the standard for new agreements at American Airlines and United, which have promised their own cockpit crew members “industry-leading” contracts. American and its pilots union, the Allied Pilots Association, are reportedly near an agreement that would at least match Delta’s pay rates. Southwest Airlines is also in contract talks with its pilots union, the Southwest Airlines Pilot Association.

Last November, United pilots rejected a tentative agreement that included a 15 percent pay increase over 18 months. The rejection was, in part, because of reporting of better economic offers being made by American and Delta to their own pilots at the time; Delta unveiled its agreement in principal with ALPA in early December.

The new wage rates set by Delta, and expected to be at least matched by American and United, are adding to airlines’ already elevated post-Covid cost structures. In March, United surprised the market by forecasting a loss in the first quarter, in part due to a decision to begin accruing expected costs from its eventual new pilots agreement during the period. The yet-to-be-finalized contract added at least 3 percentage points of costs per available seat mile (CASM) excluding fuel to the carrier’s forecast for the period.

“We need 10 percent more pilots and 5 percent more aircraft to produce the same number of pre-pandemic” available seat miles, United CEO Scott Kirby said of the post-pandemic operational realities airlines face in January.

In addition to needing more pilots, the U.S. industry faces a shortage of qualified pilots, which is being felt acutely by regional carriers. The situation has forced many major airlines, including Delta and United, to cut flying to smaller destinations, including recently Erie, Pa., and Springfield, Ill.

Cost pressures from the new pilot agreement at Delta, and expected agreements at United and other airlines, are being offset from yields. Yields, and airfares, are rising by double digits amid robust travel demand but constrained industry capacity. United forecasts a 22-23 percent increase in total unit revenues (TRASM) in the first quarter compared to 2019. And, just last week, the four largest airlines in the New York City market — American, Delta, JetBlue Airways, and United — agreed to cut schedules by up to 10 percent this summer to minimize expected air traffic control-related delays.

ALPA, in its update to pilots, said that the union is pushing for a four-year contract with pay rates that exceed those at Delta. United has proposed a five-year accord with rates that match those at the Atlanta-based airline for the first four years plus an additional raise in the fifth year. The union and carrier also disagree over how many times pay could adjust under a so-called “snap up” provision that would keep rates in line with those at American and Delta.

Delta’s contract includes a snap-up provision that, if replicated as expected, will likely create pay rate equity among pilots flying for the Big Three U.S. airlines.

ALPA noted in the memo that the economic differences between it and United are “traditionally closed out at the end of negotiations.”

Other areas of disagreement include crew scheduling practices, pilot reserve, and filling crew vacancies on narrowbody aircraft in United’s fleet, according to ALPA.

United, for its part, is actively trying to raise pressure among crew members to pressure ALPA to reach a deal. Last November, the carrier unveiled plans to open new pilot domiciles in Las Vegas and Orlando, the latter to eventually include Tampa, this spring. The bases are located where, according to United, it has the largest concentration of pilots outside of existing bases. The new bases could improve the quality of life of local pilots by eliminating their need to commute to other airports, like Chicago or Denver, to start work.

United’s last contract with its pilots, which was ratified in 2016, became amendable in 2019.

Updated with statement from United.

Edward Russell

April 4th, 2023

Tags: North America

Photo credit: A line of United jets at the Denver airport Denver International Airport

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