Slightly more than a month after reaching an agreement with the Air Line Pilots Association (ALPA), United Airlines has proposed a new wage deal with the union that would provide the airline's pilots a significant pay raise in several months alongside improved benefits.

The new pay proposal

As of 2020, pilot pay at United ranged from approximately $73,000 a year for a fresh first officer on the airline's most miniature aircraft to more than $337,000 for a widebody captain. Nonetheless, individual salaries can differ drastically depending on how often pilots are activated to fly and how long their assigned flight route would be.

The new proposal will provide United's pilots with three pay raises totaling more than 14.5% over 18 months, calculated from the start of this year. ALPA also highlighted that the new deal includes improved overtime, premium pay, and a revised retirement plan. With approximately 7% of the pilot ranks comprising women, United also included a new eight-week paid maternity leave benefit. Additionally, pilots would be provided better roster scheduling parameters to combat pilot fatigue.

The contract would need to be ratified by rank-and-file pilots to take effect, and voting will run through July 15th. If approved, the new pay proposal will generate an additional $1.3 billion value for them over the next couple of years. Chair of ALPA's United pilot group, which consists of 14,000 or so, commented:

"This agreement raises the bar for all airline pilots and leads the industry forward."

United sets the benchmark

Besides demonstrating the bargaining power that aviators are currently deservingly enjoying in a short-staffed industry, the pay proposal has set a benchmark for employee contract negotiations. As the first major US carrier to reach an amicable agreement, United has established a leading tone for its rivals, such as American Airlines, Delta Air Lines, and Southwest Airlines.

Almost all other major US carriers have been facing protests from its pilots as they demand higher pay and improvements in their hectic schedules. Worse still, pilots over at Alaska Airlines have voted to authorise a strike if an agreement on a new contract cannot be reached. American Airlines might be the next in line to make some changes, as two of its regional carriers, Envoy and Piedmont had temporarily increased pilot salaries by more than 50% to help attract and retain the required manpower.

In a video message to pilots last week, American Airlines Chief Executive Officer Robert Isom said the airline would consider other carriers' agreements, including United's, and update its pay proposals once the details are known. Isom reassured its pilots by saying:

"Our team will be paid well and be paid competitively. You are not going to fall behind network peers."

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An extremely short-staffed industry

It's been no secret that pilot shortages has been an issue way before the pandemic, but the number of early retirements and layoffs during the recent two-year crisis had made the issue a lot worse. Despite the aviation industry bouncing back rapidly and airlines ramping up flight services, several had found out the harsh way that they did not have the manpower to keep up with increasing passenger demand.

As a result, numerous carriers has had to trim their summer schedules to ensure minimal risks of flight cancellations and delays, but this only proves to be a short-term solution for a never-ending problem. Making matters worse is the slow progress of recruiting for new manpower, and the struggle in retaining current manpower. Throw in the pickets amongst all variations of airline staff from pilots, to flight attendants and even check-in personnel, it would seem that airlines would have little to zero choice but to start drafting up new contracts proposals like what United did

Source: CNBC