United Airlines and Pilot Union Sign Massive New Contract

In what has been a continuing trend this year, major airlines have been signing new deals with pilots' unions raising wages and increasing benefits. Delta, American, and Alaska among others have already signed massive new contracts (American's deal hasn't been ratified but has been agreed to be voted on), and now United is joining the fray.

In a deal worth upwards of $10 billion, United is raising pilot pay by up to 40.2% over four years for some pilots depending on aircraft type. The raise amount roughly parallels the deal American pilots struck with the airline recently and is slightly above the 34% raise Delta pilots saw inked into a deal signed earlier in 2023. The massive hike in wages follows tense negotiations between the Air Line Pilots Association (ALPA) representing United pilots and the airline itself - ALPA has been pushing for better pay and working conditions as travel demand booms post-pandemic. 

Pay raises only cover a fraction of the benefits included in the $10 billion deal. Other improvements include additional overtime pay, more holiday pay, retirement benefits, job security, and pilot-friendly scheduling adjustments. While the 40.2% raise will take effect over four years for pilots depending on aircraft type (34.5% will be the bare minimum raise over four years), the moment the contract is ratified by all 16,000 United pilots, ALPA will induce a pay raise ranging from 13.8% to 18.7% depending on aircraft type. 

United very likely will face short-term bottom-line impacts as a result of the deal; indeed, Delta's Q1 financial disclosures showed heavy losses as a result of the new contract. However, in the long-term, better pilot attrition and retainment will lead to much-needed stability in keeping planes flying and preventing future pilot shortages that decimate schedules. 

With this deal being signed, Southwest remains the last holdout of the five largest U.S. airlines, and unfortunately, negotiations for the Dallas-based airline are not in great shape. For three years the airline has been unable to reach an agreement with Southwest's Pilots Union, and as a result, the union has requested a halt to the U.S. National Mediation Board's contract review. If mediation fails it is possible a strike could occur in the future, but several other hurdles would have to be cleared before any pilots join the picket line.

As a whole, United's new deal is a huge win for its pilots and brings their benefits on par with those at American, Alaska, and Delta. Delta was the first to sign a big contract and consequently set the standard for what other pilots should expect. Seeing United up the standard is great news for the industry and hopefully Southwest can follow with something equally meaningful for its pilots. 

The industry continues to face a pilot shortage, particularly in regional airlines, and strong labor deals for pilots will be critical in attracting new talent across the board. With airline profits booming recently and many of the airlines still holding billions in cash from COVID relief money, this year in particular provides extensive leverage to labor unions to sign expensive deals, and it is great to see action occurring on that front.