- American airlines is revising the pay rise it has offered to 14,000 pilots, per CNBC
- CEO Robert Isom told pilots in a video message that the pandemic had changed the standard for compensation.
- Airlines are increasing pay to mitigate an ongoing shortage of pilots.
American airlines is revising the pay rise it offered to 14,000 pilots, becoming the latest carrier to boost salaries.
"Our team will be paid well and be paid competitively. You are not going to fall behind network peers," CEO Robert Isom told pilots in a video message sent Monday, seen by CNBC, which first reported the news Wednesday.
Isom described a pre-pandemic proposal made to unions — of an initial 4% increase, followed by a 3% increase annually — as "industry-leading at the time." However, "the standard for compensation has gone up" as a result of the pandemic, he said, per CNBC.
Airlines have been grappling with a shortage of pilots as pent-up travel demand surges back as pandemic restrictions are lifted. The shortages pre-dated Covid-19, but with flights grounded, many pilots left the industry or were encouraged to retire.
American is one of a number of airlines, including United to have grounded a number regional flights because it didn't have enough didn't have enough pilots to fly them.
In response to the problem, airline execs have been rethinking flight schedules and considering loosening the training requirements for new hires. Improving pay and working conditions has been a factor highlighted by unions and pilot groups.
Isom's message comes in the same week that pilots at two wholly American Airlines owned regional carriers received a groundbreaking pay rise, as Insider's Taylor Rains previously reported. Pilots for Piedmont Airlines, and Envoy Air will see their hourly pay increase by nearly 50% until at least August 2024, after unions reached a deal with airline execs.
Unions representing United Airlines pilots, who are currently voting on as yet unpublished contract proposals, reached an agreement with executives in May, per CNBC.
Isom said American will take other carriers' agreements into account and update pay proposals when more details are known, per CNBC.
Responding to the proposals in a blog post earlier this week, Eric Ferguson, president of the Allied Pilots Association, the union representing American Airlines pilots, accused US executives of being slow to address the pilot shortage. He said they were now "throwing money at the problem."
He urged the airline to come up with an industry-leading contract rather than waiting to see how other airlines responded.
"We want schedules that respect the quality of life of our pilot group, which in turn will improve the reliability of our airline," Ferguson said.
American and the Allied Pilots Association did not immediately respond to Insider's request for comment which was made outside of usual business hours.
The median annual wage for commercial airline pilots is $99,640 in May 2021, according to the Bureau of Labor Statistics Occupational Outlook Handbook.