United has announced plans to boost pilot salaries by 5% starting December as part of a pandemic-era deal to cut costs in 2020. While the airline had until next May to roll out the salary hikes, it chose to do so earlier, likely as a result of ongoing contract negotiations with unions. Let's find out more.

Pay up, but no new contract

According to CNBC, United unveiled the increase earlier this week, hoping to sway pilots to reach an agreement over a fresh contract. Notably, this is not a pay increase, but rather a restoration as part of the deep cuts made during the pandemic to stem losses and keep the airline afloat.

Under the deal, United had until May 2023 to start increasing salaries but has opted to do so earlier. In a statement to pilots about the accelerated raise, Senior Vice President of Flight Operations at United, Bryan Quigley said,

"This is a show of good faith and a down payment on a market-based, industry leading labor agreement. It’s also recognition of the role that you played in helping United survive the pandemic and recover so much stronger.”

However, United's pilot union was quick to react to this decision, saying in a note,

"Accelerating our raise does not change the fact we still need a contract that fully recognizes the contributions we make every day to the success of our airline."

All about negotiations

United's move comes two weeks after a contract offering a 15% pay raise over 18 months was shot down by the pilot's union with 94% support. Despite reaching an agreement in principle in May, talks fell through a few months later and both sides were back on the negotiating table in the fall. With the latest deal falling through, United's pilots plan to picket to force more concessions.

While United has been praised for being one of the only airlines to secure a contract with its pilots during the pandemic, following through is proving to be much more challenging. However, things still seem to be going better than at competitor Delta, which saw its pilot's union authorize strike action if a deal can't be reached soon.

It's unclear if and how the 5% salary increase will help negotiations in the coming weeks. While both sides still seem open to reaching an agreement, the priority for United will be to avoid any strike action and potential disruptions around the Christmas period, which is set to be a lucrative one.

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The post-pandemic era

As airlines slowly shrug off the weight of the pandemic, it is time for new employment contracts. However, with economic conditions declining in much of the world, inflation at record highs, and a potential recession, there is a fine line to be balanced for carriers. Recent months have seen some breakthroughs, such as Horizon Air's doubling in first year salaries, and hopefully, we'll see more carriers reach agreements before the year ends.

What do you think about United's decision to raise salaries? Let us know in the comments.

Source: CNBC

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  United Airlines

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