American Airlines Agrees to Substantial Pilot Pay Raises — Here's What It Could Mean For Travelers The deal guarantees an immediate 21% pay increase for around 15,000 pilots and outlines further raises over the next four years.
Key Takeaways
- American, United, and Delta pilots reached a deal for pay bumps ranging from 34% to 46% over the next few years.
- Experts say the financial burden could trickle down to consumers in the form of higher ticket prices.
Opinions expressed by Entrepreneur contributors are their own.
On Monday, American Airlines reached a deal with its pilot union, giving roughly 15,000 pilots an immediate pay increase of 21%, with further raises over the next four years. By the end of the contract period in 2027, pilot compensation at the airline will increase by 46%.
The deal comes after years of pilots across the country advocating for better pay and benefits since the pandemic, when shortages impacted pilots' schedules and well-being.
In the last four months, United and Delta pilots also reached agreements with their airlines, getting pay increases of 40% over four years, and 34% within three years, respectively.
Although it's good news for workers, experts are warning that the increase could mean higher ticket prices for travelers.
Related: American Airlines Sues Website for 'Bait-and-Switch' Tactic to Sell Cheaper Airfares
The American and United contracts come at a cost of nearly $10 billion each, while Delta's is priced at $7.2 billion, according to TheStreet, and some of those expenses may trickle down to consumers.
"I think it is somewhat naïve to think corporations will not try to put all of this through to price," Doug Kass, hedge fund manager and writer for Real Money Pro, told the outlet. "A lot of industries are very consolidated. Most executives have their comp highly weighted to their stock price. Even worse, in the case of flying, ticket prices will go way up, and the airports will still be a disaster."
The other alternative, for airlines to simply absorb the costs, could lead to less profitability and dissatisfy shareholders.
For now, the cost of airfare has been steadily decreasing since 2022 highs. According to NerdWallet's Travel Price Index, the cost of flights was down 18.6% year-over-year in July.
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