American, US Airways Pilots Agree To Big Pay Raise

(RTTNews) - American Airlines Group Inc (AAL) on Friday said pilots at its subsidiaries American Airlines and US Airways, represented by Allied Pilots Association, have approved a new five-year contract which provides immediate pay raises of 23 percent and subsequent annual raises of three percent for the next five years.

The multi-year agreement of a single labor contract by the pilots at American Airlines and US Airways is a part of the process toward combining the two carriers' workforce.

American Airlines Group was formed by the December 2013 merger of AMR Corp, the parent company of American Airlines, and US Airways Group, the parent company of US Airways.

The Allied Pilots Association is a body representing 15,000 pilots at American Airlines and US Airways. The Association said that the contract was approved 66 percent to 34 percent, with 95 percent of eligible pilots casting a vote.

The pay raise is retroactive to December 2.

The outcome could help American avoid some of the labor-integration issues that have dogged other airlines after mergers.

United Airlines has a joint contract with pilots but not with mechanics or flight attendants. The pilots at US Airways did not approve a joint contract after the 2005 merger with America West Airlines, forcing the combined carrier to operate with separate crews.

Pilots at American and US Airways will get the retroactive pay raises plus annual raises of 3 percent through 2019.

American estimated this week that if approved, the pilot contract would add $600 million to its costs this year.

AAL is trading at $50.24, down $2.00 or 3.83%, on a volume of 8 million shares on the Nasdaq.