30,000 American Airlines workers to get 22% pay hikes
American Airlines reached an interim contract with 30,000 ground workers in a deal that union officials said would deliver an average pay raise of 22%.
The agreement between American Airlines (AAL) and the TWU-IAM Association, announced Friday, covers 12 organized groups of workers in maintenance, fleet service other related jobs. It will add $75 million to American's pre-tax costs in the third quarter and $120 million in the fourth quarter, according to a Securities and Exchange Commission filing.
Pay increases will go into effect immediately as negotiators pursue a finalized collective bargaining agreement for the association, which is an alliance of Transport Workers Union and the International Association of Machinists and Aerospace Workers that represents about one-third of American Airline's workforce.
“Association members at American Airlines will receive the industry-best wages they deserve now,” union chair Sito Pantoja and vice chair Harry Lombardo said in a statement. “The process of bargaining joint contracts after a mega airline merger like American and U.S. Airways is complex and time consuming."
American Airlines said the deal includes the following average pay raises:
—15% to 36% for maintenance and related workers
—24% for fleet service employees
—31% for tower planners
—55% for weight and balance planners
American Airlines said the workers in these groups will have the highest hourly wage rates when compared with peers at other network carriers. Union negotiators described the deal as bringing the company's compensation in line with, or slightly ahead of, comparable positions at rivals Delta and United.
“We are pleased to reach this innovative and unprecedented agreement," American Airlines Chief Operating Officer Robert Isom said in a statement. “We will continue to work toward a single agreement that accommodates the unique needs of each of these diverse groups, and remain committed to reaching that single agreement as quickly as we can.”
American Airlines shares rose 1.7% in mid-day trading to $34.15.
Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.