Pilots at American Airlines ratified a new contract that will, among other things, increase pilot compensation by more than 46% over the next four years, the airline announced yesterday (Aug. 21).
The pilot pay at the company will see an immediate increase of 21% on average upon approval of the contract. The rest of the uptick will come from “increases in pilots’ 401(k) contributions and subsequent pay raises each May” to reach 46% by August 2027.
“This agreement will help American immediately expand our pilot training capacity to support under-utilized aircraft and future flying and provide our pilots with more opportunities to progress in their careers,” said American Airlines’ CEO Robert Isom.
Like other major airline pilot contracts reached this year by the likes of Delta Air Lines and United Airlines, the Fort Worth, Texas-based company’s agreement not only focuses on enhanced compensation but also improved long-term disability benefits, life insurance, scheduling, retirement benefits, and more.
This contract is a marked improvement from an offer that pilots at American overwhelmingly rejected last November, where they would’ve received a 19% increase in pay over two years. After rounds of negotiation and renegotiation, the management and the union finally reached a tentative agreement in late July.
In recent months, major US airlines have raked in big profits—American made a $1.3 billion profit in the quarter ended June 30—on the back of post-pandemic recovery and booming international travel. Simultaneously, they’re facing a pilot crunch while expanding routes. That makes the companies ripe for union disruption, and pilots are leveraging that. The contract victories are a sign that building pressure is in fact yielding results.
73%: Share of pilots who approved the new contract over two weeks of voting, which closed on Monday.
$9.6 billion: Additional value the new contract provides versus the prior agreement
20%: Share quality-of-life improvements represent in the the increased value of the new contract, including enhancements to vacation benefits and reassignment pay and increases in training pay and per diem (daily allowance to cover living expenses when travelling on the job).
$1.1 billion: Immediate, one-time payments, and ratification bonuses to be made according to the deal
15,000: American Airlines pilots represented by the Allied Pilots Association
“This contract is a big first step toward restoring the wages, benefits and work rules that were lost during the past two decades while our profession was under continuous assault. As pilots, we hold a tremendous amount of responsibility with every flight we take. It’s a responsibility we take seriously, as evidenced by the US airline industry’s unrivaled safety record, and it’s time for our profession to provide rewards commensurate with its unique demands.”
—Captain Ed Sicher, president of the Allied Pilots Association, the union that represents American’s 15,000 pilots in a statement on Aug. 21
In March this year, the Delta pilots’ union scored a new contract, valued at $7 billion, which would boost average pay 34% over four years, among other things. In the January-March quarter, Delta clocked record revenues even after making $735 million in bonuses to pilots as part of the new contract.
In July, after more than four years of negotiations, picketing, and strike threats, United Airline pilots, reached “an agreement in principle” that would increase pay by 40% in the coming years. Over the life of the contract, the airline will spend $10 billion on improved pay packages, better quality-of-life measures, and other benefits.
Pilots at Delta and United are both represented by the Air Line Pilots Association, Int’l (ALPA). Founded in 1931, ALPA is the largest airline pilot union in the world and represents over 74,000 pilots at 42 US and Canadian airlines.
The 1926 Railway Labor Act, which expanded to include airlines in 1936, aims to avoid any interruption of interstate commerce by bargaining unions and their companies. By design, the federal law dictates that airline industry labor contracts do not expire, making striking near impossible. Rather, they become open for change or “amendable” at the end.
Bargaining on the next contract for American’s pilots could begin as soon as November 2026.