American's pilots would get a 23 percent retroactive pay hike. An analyst says improved employee culture should offset some of the wage increase. Fred Katayama reports.
It's looking like a smooth landing for American Airlines. Its pilots union accepted its final contract offer. That would give the pilots a 23 percent retroactive wage increase if they vote to approve the deal. The world's largest airline said it was pleased, but the union's board said it was disappointed by some of the language on work rules. American merged with US Airways last year, The company wants to settle contracts so it can integrate the two workforces. American isn't offering its pilots profit sharing, but it plans to pay industry leading wages instead, according to the Wall Street Journal. The pilots union hasn't set a date for the contract vote, but it's expected to take place later this month. If American's pilots vote no, the deal goes into arbitration, which would result in smaller wage hikes. American's flight attendants went to arbitration after rejecting the deal negotiated by their union but have since gotten a new contract. American is trying to avoid the multi-year contract delays that have plagued other merged airlines. Cowen senior analyst Helane Becker said last week, "Although the new contracts involve significant rate increases, which should be expected, the improved employee culture, productivity, and ability to integrate at a quicker pace should offset some of the pay increases. Still pending: contracts with other work groups such as ticketing agents. American's shares, which more than doubled last year, rose in early trading.