Last updated: 11:15 AM ET, Thu June 30 2016

United Finally Near Deal with Flight Attendants

Airlines & Airports | United Airlines | Josh Lew | June 30, 2016

United Finally Near Deal with Flight Attendants

Photo courtesy of United Airlines

United Airlines and the leaders of its flight attendant unions have tentatively agreed to a new contract which would, among other things, finally unify the flight attendants from United and Continental. The two groups have been operating separately for the past five years even though the airlines themselves have merged in practice. 

The contract has to be approved by both groups of cabin crew members. According to United's union, not only would the deal unify the two airlines’ flight attendants, it would also make them among the highest paid in the industry. 

Like other legacy carriers, flight attendants working for United get paid based on how long they have been with the company. For example, those who worked for the airline for more than 12 years would, according to the New York Times, be paid $62 per hour under the new contract. Cabin crew with the same level of seniority and Delta and American are paid slightly less. 

If approved, the contract would give the most senior flight attendants a 31 percent increase in pay. They would also keep profit-sharing rights and other perks. 

A full vote, which will include all 25,000 flight attendants who currently work for the airline, will take place in July, but the union leadership seems quite pleased with the current deal. They have already voted unanimously to approve the offer. If it is fully approved, the contract would be good for the next five years.  

$62 per hour seems high, but keep in mind that flight attendants are only paid for flight time. That can turn out to be a significant total for 10-plus hour international flights, but it is actually not that much for attendants who work on shorter domestic routes. 

Read More: Is AA Following Through With Improved Employee Relations Promise?

Getting new deals for all employees has been one of the focuses of new CEO Oscar Munoz, who took over the airline last September, but suffered from health problem until recently. He has been trying to improve labor relations, which were poor under his predecessors, since he returned to his office in March. 

Munoz has one major contract left to negotiate. Earlier this year, United’s mechanics voted not to accept a new contract offer from the airline. Once they have a new deal, Munoz will have been successful in his promise to improve labor relations at the airline. 

The one negative from these new contracts: they will increase United operating costs at a time when shareholders are watching the balance sheet closely. 

Airlines have been struggling to control unit revenue numbers recently. They have been expanding capacity, but revenue has not kept up with this expansion. This has disappointed investors and caused the airline to scale back on its growth plans. 

The new contracts and pay raises will certainly hit revenue numbers, but Munoz has said that making employees happy is one of the essential building blocks of his plan to improve United in the coming years. He apparently believes that a short-term hit in revenue is worth it if employee relations improve.   

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