United's Pilots Get A Raise
Photo courtesy of United Airlines
United Airlines pilots finally got what they were asking for.
Earlier this week, United Continental Inc.’s pilots voted to approve an extension on their current contract. The deal will see their wages increased by 22 percent by 2018. United has about 12,000 pilots, 10,569 who were eligible to cast a ballot. According to the Air Line Pilots Association (ALPA), 79 percent of those who participated chose to approve the new deal.
A good deal for pilots
The exact details of the extension were not made public, but the pilots’ union has said that the compensation package is better than what Delta and American are currently offering to their cockpit crews. Captain Jay Heppner, the chairman of United’s pilots union, said that getting this agreement from United and having it ratified by the pilots was a huge step in the right direction: “This is an agreement that recognizes the professionalism and contributions our pilots make each day to the success of United Airlines.
"It has long been our contention that this pilot group is among the most talented and experienced in the airline business. This agreement recognizes our contributions to making United Airlines a world class airline, and acknowledges our commitment to making United the airline of choice for business and leisure travelers."
In addition to the pay raise, pilots will get have a new set of rules that should guarantee a longer rest period before and after long-haul flights. Formerly furloughed pilots, meanwhile, will have their pay and vacation value restored.
Happier employees should make for a better airline
After its merger with Continental, United struggled with employee relations. The carrier hired new executives last year to get the Chicago-based giant back on track after poorer than expected earnings, a falling level of customer satisfaction and rumblings amongst employees.
New CEO Oscar Munoz is expected to return to the helm of the airline as soon as he recovers from a successful heart transplant. Munoz was well enough to make a statement about the new deal: “I want to recognize the efforts of both ALPA’s and United’s negotiating teams. Their hard work enabled us to achieve this ratified contract extension more than a year ahead of the amendable date.”
One of the major goals that Munoz had when he started was to improve management's relationship with employees. Good labor relations is something that has been sorely lacking at United since its 2010 merger with Continental. Before his heart attack and subsequent transplant, the CEO spent time traveling the country to meet with employees and passengers to hear their concerns and ideas for improving the airline.
The next target for the new execs is to get a contract extension for the airline’s maintenance workers. Once this second deal is inked, it will put the airline on good terms with its core operational employees.
"Worth the investment"
One group might be unhappy with United’s present and future deals with the unions. Investors are generally interested in seeing airlines lower their operating costs so that they can better compete with ultra-budget airlines and maximize profits while fuel prices are low. The new contracts will cost the airline in the short term: units costs are expected to rise about one percent this year. However, analyst Adam Hackel told Reuters that "while it will increase costs in the near term, having good labor relations is worth the investment. “
United's goal seems to be to build a strong base that the airline can use to rebuild its image and increase the level of quality that it can offer customers. In the long run, the airline may actually be able to ascend from its current slot as the third best legacy carrier (out of three).
More by Josh Lew
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