American Airlines Group Inc (AAL) to Raise Pilots’ Pay Starting at 23% After Union Ratifies Contract

Americal Airlines (AAL)

American Airlines Group Inc (NASDAQ:AAL) is set to raise the pay rate of its pilots by an initial 23 percent, with additional 3 percent annual raises  accruing each year covering a five year term contract. Union leaders, representing the Allied Pilots Association, have accepted the five year agreement with American Airlines, and union members will ratify it in a vote to be cast in the middle of this month after all the terms stipulated in the contract have been finalized.

American Airlines Group Inc (NASDAQ:AAL), the world’s largest carrier after its merger with US Airways back in December 2013, have been working to implement common pay scales and work rules for pilots coming from two formerly separate aviation companies. The Allied Pilots Association currently consists of 15,000 members, with 10,000 coming from American Airlines and 5,000 from the US Airways. The pilots have been at decades long conflict with their respective managements, and the company is looking forward to a smooth integration process by motivating them with a pay structure that is above the pay rates compared to other airlines.  If approved by union members, the new pay rate stipulated under the deal will be 7 percent higher than that of Delta Air Lines, Inc. (NYSE:DAL).

Americal Airlines (AAL)In a phone interview with Bloomberg, Kit Darby of Peachtree City, Georgia-based Kit Darby Aviation Consulting noted that the new deal will put the pilots at American Airlines Group Inc (NASDAQ:AAL) one of the highest paid in the industry, if not at all the highest. Data from Darby indicates that the most experienced pilots from American Airlines, flying its largest aircrafts, receive an annual pay of $213,800. Pilots with comparable experience from rival Delta Air Lines, on the other hand, are paid $38,000 more on an annual basis.

Prior to offering its pilots an increased pay rate, American Airlines Group Inc (NASDAQ:AAL) has implemented a raise of 4 percent in additional pay to unions that have agreed with labor deals earlier last month. The same rate is offered to the pilots under the new agreement. The final contract offer, which includes the initial 4 percent pay raise, will make a 23 percent hike retroactive to December 2 of last year. If approved by the Allied Pilots Association’s members’ votes in mid-January of this year, an additional 3 percent increase in pay rate will be deemed effective from January 1 of this year, with subsequent increases in the same rate for the years 2016, 2017, 2018, and 2019.

This article has been written by Nonito Guntan.

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