Southwest Airlines and the pilots union reach a labor agreement

The union did not immediately provide details about the pay increases, but the five-year deal is worth about $12 billion, Casey Murray, president of the Southwest Airlines Pilots Association, told CNBC on Tuesday. By comparison, United Airlines’ new four-year pilot contract is worth about $10 billion, according to the pilots’ union.

Southwest pilots will need to approve the contract. CNBC reported earlier this month that the two sides were close to reaching an agreement.

“We are pleased to reach a tentative agreement with the Southwest Airlines Pilots Association for more than 10,000 Southwest pilots,” Southwest said in a statement. “The AIP is a major milestone in this process, and we look forward to the next steps.”

American, United and Delta finalized pilot deals earlier this year worth billions and gave pilots double-digit pay increases. The Covid pandemic derailed negotiations across the sector, pausing wage increases across the heavily unionized industry even as demand returned and inflation reached its highest levels in several decades.

As demand for travel declines, pilots, flight attendants and other aviation workers demand not only higher wages, but also better working conditions such as more predictable schedules.

Pilots and flight attendants at Southwest have complained about erratic schedules, especially during turbulence. One factor in last year’s Southwest holiday collapse, which stranded nearly 2 million customers, was outdated software that left crews out of position on rescheduled flights. On Monday, the US Department of Transportation announced a fine of $140 million on the airline due to its handling of the crisis.

Flight attendants at Southwest recently rejected a preliminary agreement in a vote, although the union said there would be a re-vote, citing complaints about a technical glitch in online voting.

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Labor unions flexed their power throughout the year, resulting in a series of major labor deals including agreements between Hollywood studios and actors, and studios and writers, as well as between automakers and the United Auto Workers union. These agreements came in the wake of prolonged strikes.

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