Pay to Rise as Much as 40% in Deal Reached by United and Pilots
United Airlines pilots have reached an agreement with the company Saturday. The contract is valued at $10 billion and will increase the pay by up to 40% over the course of four years.
After a recent agreement with the United States, the proposed contract represents another major wage win for pilots.
Delta Air Lines
The approval was made in March. The significant raises reflect the shortage of pilots and strong demand for air travel in the United States.
The agreement also provides for better work rules, vacations, retirement, and other benefits.
Pilots at major airlines like United can easily earn six-figure salary. Senior pilots who fly large planes and international routes can earn up to several hundred thousand dollars per year.
United Airlines, based in Chicago said that the agreement would benefit its business.
'United Next'
The strategy includes an expansion plan, which includes the purchase larger planes in order to increase the number seats per flight on North American flights by nearly 30 percent. By 2026, the number premium seats per flight will also be increased by 75 percent.
Scott Kirby is the chief executive of United Airlines. He said: "We have been able to reach an agreement with our pilots who are world-class and deserve a contract that leads in their industry."
Writer
LinkedIn is a social networking site.
The agreement, according to union officials, was the culmination of four years' worth of negotiations. It represents a "landmark" deal for the airline industry at a time when travel demand is on the rise after dipping sharply during the peak of the pandemic.
'The unwavering dedication shown by United pilots in the past few years has ensured our solidarity, which was crucial to achieving this historical agreement.' Capt. Garth Thompson, Chairman of the Master Executive Council for the United Air Line Pilots Association International said in an
Statement
.
The Air Line Pilots Association is the largest airline pilots union in the United States. It represents 74,000 pilots in 42 airlines across the United States and Canada. This includes 16,000 United Airlines pilots.
Now, the union and the management will complete the final wording of the agreement. The pilots' association must vote to approve the agreement. This is expected within the next few weeks.
Delta approved in March a contract which includes improvements for scheduling, retirement, and other benefits. Delta's contract raised the bar for pilot compensation.
Air travel was severely curtailed in the early stages of the pandemic, which led to a significant reduction of pilots. The carriers are increasing the pay and benefits of pilots as demand has risen rapidly over the past year.
Niraj Chokshi contributed reporting.
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United Airlines
After a pandemic decimated its business, the company announced that it would create 25,000 new jobs in a year and place its largest ever order of airplanes. It was betting on an increase in domestic travel and demand for premium seats.
United will be able to expand its fleet by increasing the average size and number of aircraft. The order for 270 single aisle Boeing and Airbus aircraft is the largest purchase made by a U.S. carrier in the last decade. The company plans to expand its workforce, with up to 5,000 people in Newark, and 4,000 more in San Francisco.
United's acquisition is the strongest sign yet that airline executives are confident that the pandemic of coronavirus is ending in the United States, and that travel demand will increase in the coming years. Only a year before, the airline industry was in desperate need of government bailouts. They borrowed billions to survive.
This order is also a huge win for
Boeing
The manufacturer will supply 200 of the 737 Max. The manufacturer will provide 200 of
United's
New planes, All Versions of the
737 Max
Airbus will supply the remaining 70 aircraft, all of which are from the A321neo, which is directly in competition with the Max.
United, a Chicago-based airline, refused to disclose how much the company paid for the planes, or how it would finance the orders. In a filing with the Securities and Exchange Commission, United Airlines said that it expects to spend $36 billion over the next few years on planes, improvements to planes, engines, and other capital investment. Around 40 percent of this amount will be spent before 2023 when the first of 270 planes is expected to be delivered.
American Airlines announced that in 2011, it would be launching a new airline.
It was purchasing 460 planes
The last major order from a U.S. carrier. United's fleet has a lower age than American Airlines and Delta Air Lines - its two main competitors. About a third United's flights are operated by regional jets with 50 seats, offering only one class of seating. This new order combined with other orders will allow United to reduce the number of flights using these small planes from about 10% to around 10%, which will enable it to sell premium tickets.
United anticipates adding more than 500 aircraft in the next few years, including previously announced orders. Around 300 of the new planes will replace smaller jets while 200 will expand the fleet. The airline also plans to upgrade single-aisle aircraft to match interiors of new planes. This will include amenities such as seat-back screens, and improved internet service. Just over 800 planes are owned by the airline.
Andrew Nocella said this in a conference call with journalists.
The expansion, which United calls 'United Next', will increase the number seats per United flight on North American flights by almost 30 percent by 2026 and the number premium seats per flight increase by 75 percent. United hopes to attract business and affluent travelers away from Delta by increasing the number of business and first-class seats available for purchase.
George Dimitroff is the head of aircraft valuations at Ascend By Cirium, an aviation consulting firm.
This is just one of many orders that you can make.
Boeing
Since global regulators began, the United States has been able to win in recent months
Lifting their bans on the 737 Max
Late last year. United ordered 150 Max 10 jets, and 50 Max 8, the smaller and most popular Max 8 model. The Max 10 has been a difficult sell for the manufacturer. It is important to note that while both models are nearly identical in cost, the Max 10 costs more. Cirium values Max 10s at $50 million each, while a Max 8 is valued at less than $44million. United said that the Max 10 could seat 189 passengers, compared to 166 for the Max 8). The A321neo can seat roughly the same number of passengers as the Max 10).
Mr. Dimitroff stated that 'It is logical for United and it is logical for Boeing'.
The new planes would be best used for domestic flights but could also be used on trans-Atlantic routes. The order does not include any of the larger twin-aisle aircraft that are typically used on international flights. However, United has delivered about 30 of these planes, Boeing 787s or 777s, over the last two years.
Nocella stated that it was not necessary to order large-body jets at this time. He added that the airline will be flying more international flights in summer 2022 than in 2019.
Scott Kirby said that United laid the foundation for the order this week during a one-day executive meeting held at O'Hare International Airport, Chicago, last summer. The airline chose not to retire any aircraft during the pandemic as other airlines did, and instead began to plan the strategy for this week's order.
In a conference call with journalists, Mr. Kirby stated that he and his colleagues spent a day discussing where they thought the world would go. It has turned out to be close to our expectations.
The air travel industry has slowly recovered during the pandemic. This recovery has accelerated in recent months as people have begun to return to flying.
Summer vacations
The Transportation Security Administration (TSA) screened more than 2.2 million passengers at airports on Sunday, which is the highest number since the pandemic started 16 months ago.
United
This week, the company said that it expects to make a profit before taxes in July. It will be its first monthly profit since January 2020.
United Airlines said that the new planes they were buying would improve their overall fuel efficiency of about 11 percent.