Airlines

American Airlines Pilots on the Verge of Approving Groundbreaking Contract with Significant Pay Raises

The pilots’ union at American Airlines will vote this month on a new contract that calls for a 21% salary rise this year, in addition to retroactive raises going back to 2020 and more increases in future years.

The May provisional agreement will be put to a vote among union members to establish a new collective bargaining agreement, according to the Allied Pilots Association, which represents more than 15,000 pilots at American. This decision was made, the union’s board of directors declared on Friday.

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The Allied Pilots Association reports that members will cast ballots between July 24 and August 7. The agreement is in force for four years and is amendable beginning on August 1, 2027. Based on qualified earnings, pilots would receive back pay of 4% in 2020, 4% in 2021, 14% in 2022, and around 21% in 2023 for the three months prior to the date of signing.

The pay increase for American’s pilots would be roughly 21% this year, 5% in 2024, 4% in 2025, 4% in 2026, and 3% in 2027. Pilots would get a 17% 401(k) contribution in 2024, and an increased 18% contribution in 2026. By 2027, that entails a rise of 41.5%.

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In line with Delta Air Lines, the new contract would increase profit sharing to 10% up to $2.5 billion in pre-tax profit and 20% for anything higher. There are also new names for long-term disability, benefits, and other things.

Speaking on behalf of American Airlines, spokesperson Sarah Jantz stated, “We appreciate the Allied Pilots Association board of directors reviewing the proposed tentative agreement on a new four-year contract for American’s pilots. With improved quality-of-life features that are specific to American’s pilots, the agreement would give our pilots salary and profit sharing that are competitive with the highest levels in the industry. Our pilots deserve this contract, which we are happy to provide them.

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Airlines

German Carrier Lufthansa Plans for 20% Job Cuts in Administration

Lufthansa Airlines is reportedly planning significant job cuts in its administrative workforce. According to Manager Magazin, the German carrier intends to reduce administrative positions by 20% as part of its cost-cutting measures amidst an anticipated decline in earnings.

This reduction could impact approximately 400 jobs, the report revealed. While Lufthansa has not directly commented on the layoffs, the airline confirmed its goal of cutting administrative costs by 20% by 2028.

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The strategy involves leveraging digital technologies, including artificial intelligence and automation. “A hiring freeze is currently in place for administrative roles at Lufthansa Airlines,” said a company spokesperson.

The staff reduction is expected to occur through natural attrition and age-related turnover, rather than forced layoffs. The internal projection cited by the magazine warns that Lufthansa could face an operating loss of €800 million ($843.92 million) by 2026 if no corrective measures are taken.

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The report highlights the challenges companies face in aligning workforce requirements with current and future demands. Failure to adapt could necessitate drastic actions, such as restructuring and layoffs, which carry significant repercussions for both the organization and its employees.

As Lufthansa navigates these challenges, the airline appears committed to balancing cost efficiency with digital transformation to maintain its competitiveness in a rapidly evolving industry.