United gives pilots 5% raises early after contract talks turn rocky

United Airlines is giving pilots 5% raises — part of a pandemic cost-reduction agreement — months ahead of schedule, days after pilots overwhelmingly rejected a new contract agreement.


Negotiations for new labor deals have been difficult at United and other carriers.


In 2020, the Chicago-based carrier and the Air Line Pilots Association, which represents United’s more than 13,000 pilots, agreed to offer aviators a round of buyouts as the company scrambled to reduce costs during the industry’s worst-ever crisis.


In exchange, the company said it would raise its pilots’ hourly pay by 5% once the airline returned to a pretax margin at or above 5% for 12 months. They also agreed to job and pay protections.


United cited the carrier’s return to profitability and upbeat outlook for handing the raises out this year. The airline reported a pretax margin of 9% in the last quarter. While United has still lost money in the first nine months of the year, it expects a profitable end to 2022.


The company could have waited until May 2023 to pay the raises, Bryan Quigley, senior vice president of flight operations at United wrote to pilots on Thursday. The raises will take effect during the December bid month.


“This is a show of good faith and a down payment on a market-based, industry leading labor agreement,” Quigley wrote. “It’s also recognition of the role that you played in helping United survive the pandemic and recover so much stronger.”


United pilots overwhelmingly voted down a recent proposed agreement that would have increased pay by about 15% over 18 months.

“Accelerating our raise does not change the fact we still need a contract that fully recognizes the contributions we make every day to the success of our airline,” United’s pilot union said in a note to members on Thursday.

The union said that United pilots plan to picket outside United’s flight training center in Denver next Tuesday. Delta, Southwest, American and FedEx pilots have also picketed to demand better pay and schedules in recent months.


This article originally appeared on CNBC

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