The contract's approval comes just ahead of a busy summer travel period, following years of negotiations.
The Allied Pilots Association (APA), which represents over 13,000 American Airlines pilots based in Texas, declared on Friday that it will progress with finalizing the contractual language before presenting the contract to its board for approval.
While American Airlines did not disclose the overall value of the contract, it stated that the contract offers pay and profit sharing that equals the highest in the industry, along with improved quality-of-life provisions.
According to the preliminary agreement and as confirmed by three sources with direct knowledge, American Airlines pilots would receive a pay hike of 21% in 2023, followed by an increase of 5% in the second year and an annual rise of 4% for the next two years of the contract. These sources, who requested anonymity as the details are not yet public, mentioned that the contract, lasting four years, will provide pay rates comparable to those secured by pilots at Delta Air Lines.
The contract also includes an additional 3% raise in 2027 when it becomes amendable. It contains improvements on scheduling, a crucial aspect for pilots seeking a better balance between their work and personal life in a profession that often requires extended periods away from their families.
The previous contract was up for renewal in 2020. However, the pilots rejected an offer last year that involved a 19% salary increase over two years.
Industry insiders claim that Delta's pilot contract has become a new standard for contract negotiations in North America. This standard is driving demands for higher wages at Canadian carriers, where pilots aim to close the wage gap with their U.S. counterparts.
American Airlines had anticipated that matching Delta's deal would cost them roughly $8 billion over four years.
Delta's pilots ratified their contract in March, a deal that entails over $7 billion in cumulative increases in pay and benefits over the course of four years. This highlights the bargaining power of pilots as airlines scramble to increase staff numbers ahead of an anticipated busy summer travel season.
American Airlines, along with Delta, United Airlines, and Southwest Airlines, are projected to hire approximately 8,000 pilots this year. Analysts at Jefferies estimate a shortage of about 10,000 pilots in the United States, a supply-demand gap predicted to continue until 2027.
