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American Airlines offers to boost pilot pay 17% by the end of 2024

Fourth of July weekend travel chaos
Fourth of July weekend travel chaos 03:37

American Airlines is offering pilots raises of nearly 17% by the end of 2024, a sign that the airline is trying to ameliorate the staffing shortages that have plagued the industry.

CEO Robert Isom said Thursday that the proposal would boost pilot wages at American to the levels detailed in a tentative agreement between United Airlines and its pilots. Isom said in a video sent to pilots that the airline's workers "will be paid well, and paid competitively, no matter what."

According to Isom, the captain of a Boeing 737 at the top of the proposed pay scale would earn a base salary of about $340,000 a year by the end of 2024. Senior captains of bigger planes, such as Boeing 777s, would earn about $425,000 a year. He said the company is also offering a premium for reassignments, a better profit-sharing program and other add-ons.

American, which is based in Fort Worth, Texas, lost $2 billion last year but is seeing stronger revenue in 2022 as travel continues to recover from the worst of the pandemic.

The Allied Pilots Association, which represents the airline's roughly 13,000 pilots, did not immediately respond to a request for comment from the Associated Press.

A spokesman for the union told CNBC last week that American was "trying to fly airplanes without the pilots available." The allegations prompted lawmakers, including Democratic Rep. Ro Khanna and independent Sen. Bernie Sanders, to call for steep fines for airlines that schedule flights they can't staff.

American recently dropped flights to four cities in Iowa, Ohio and New York because of a lack of regional pilots.

Other airlines in negotiations

United pilots, who currently earn more than counterparts at American, are voting through July 15 on a deal that would give them raises of about 14% through 2024.

Pilots at Delta, Southwest and Alaska are in negotiations for new contracts. They have picketed at airports while complaining that understaffing is causing them to work too many flights and risk fatigue.

The news comes ahead of a holiday travel weekend expected to be the busiest since the pandemic began. Delta has warned of "operational challenges" during the July 4 weekend and preemptively offered free rebooking for passengers flying then. Airlines and the Federal Aviation Administration have blamed each other for staffing shortages leading to cancellations and delays.

CBS News' Khristopher Brooks and Peter Greenberg contributed reporting.

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