According to a draft agreement, American Airlines has offered a 19% pay increase to its pilots over two years. The pilots will get a 12% raise on the date the contract is signed, with another 5% hike after a year and another 2% after two years. The company’s June offer to hike base pay by about 17% through 2024 is estimated to cost American more than $2 billion.
The draft agreement has not yet been approved by the board of American’s pilot union. If approved, it is expected to set the standard for contractnegotiations at rival airlines United Airlines and Delta Air Lines. American has also offered an additional 3% increase in pay rates to match any salary increases at United and Delta. This offer comes at a time when the airline industry is facing a shortage of pilots after thousands were laid off during the coronavirus pandemic.
The pilot shortage has made it difficult for airlines to increase their capacity to meet the increasing demand for travel. Last week, American Airlines said that they expect to beoperating at 95%-100% of their pre-pandemic capacity by next year. Delta has said that they expect to have their 2019 capacity restored by next summer.