• American Airlines Tile
    American Airlines
    IATA/ICAO Code:
    AA/AAL
    Airline Type:
    Full Service Carrier
    Hub(s):
    Charlotte Douglas International Airport, Chicago O'Hare International Airport, Dallas/Fort Worth International Airport, Los Angeles International Airport, Miami International Airport, New York JFK Airport, LaGuardia Airport, Philadelphia International Airport, Phoenix Sky Harbor International Airport
    Year Founded:
    1926
    Alliance:
    oneworld
    CEO:
    Robert Isom
    Country:
    United States
    Airline Group:
    American Airlines Group
    Region:
    North America
    Loyalty Program:
    AAdvantage

It seems the laws of supply and demand are tilting towards airline staff if the latest pilot increases are anything to go by. On Thursday, in an internal video, American Airlines CEO Robert Isom said the carrier had offered its pilots pay rises nearing 17% under a new contract. The proposal includes a 6% pay raise at signing, followed by 5% raises at the start of 2023 and 2024.

In June, the union representing the American Airlines' (American) pilots, the Allied Pilots Association (APA), heavily criticized the airline for failing to lead on the pay issue. The APA was referring to Isom's earlier comments that American would "wait and see" what happens with pilot pay at other airlines before proceeding with its negotiations. In a statement, APA president Captain Eric Ferguson said: "We urge Mr. Isom to rethink the wait and see approach and do something that unfortunately seems so foreign to the management team at American Airlines....lead."

The pay increase will add $2 billion to American's costs

American 787
American Airlines widebody pilots are looking at substantial pay increases if the new proposal is ratified. Photo: Getty Images

According to the Dallas Morning News, the American offer will add around $2 billion in extra compensation to the airline's 12,7600 pilots. Under the deal, American narrowbody captains can earn as much as $340,000 annually, a $45,000 increase on their current earnings. Pilots on widebody jets like the Boeing B787 would see a $64,000 raise, meaning they can make as much as $425,000 a year. American has a total fleet of 914 aircraft, with ch-aviation.com data showing 88% are narrowbodies, comprising 456 Airbus A320-family aircraft and 345 Boeing B737s. The widebodies are slite between 67 Boeing B777s and 46 B787s.

This latest proposal comes hot on the heels of United Airlines and its pilots reaching a tentative agreement that includes more than 14% in total pay increases within 18 months. In the staff video, Isom said:

"A couple of weeks ago, I made a commitment to our pilots, and all of our team members, really, that the American Airlines team will be paid well and paid competitively, no matter what. That commitment included a promise to improve our pilot proposal once we knew the details of the United tentative agreement."

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Pilot shortages are driving pay up at regional carriers

American ERJ145
American Airlines' regional services are expected to return to capacity in 2-3 years. Photo: Getty Images

Beyond direct pay issues, the APA has been pushing for better scheduling practices, less time spent on reserve and other quality of life issues. Isom says these have been addressed by giving pilots greater certainty and more control regarding replacement flying. The proposal also includes a 16% increase in retirement savings accounts and improved profit-sharing benefits. Subtlely increasing the pressure on pilots and the APA, Isom wants the proposed contract ratified by September 30, promising extra signing bonuses and retroactive pay to meet that timeframe.

Pilots shortages are heavily impacting the regional airline sector, leaving aircraft grounded and hundreds of flights canceled. In June, American's regional carrier, Envoy Air, offered pilots triple pay to pick up trips at risk of cancelation. Envoy said it is offering pilots triple pay to fly uncovered flights on their days off in July to "ensure we can operate dependably for our customers." American's regional subsidiaries, Envoy Air, Piedmont Airlines and PSA Airlines, have already announced a temporary 50% pay raise until August 2024 to alleviate the pilot shortages.

Simple Flying has reached out to American Airlines and the APA and will update this article with any response.

Source: Dallas Morning News