Reuters is reporting Spirit Airlines is offering a big pay raise to its pilots. According to a union memo seen by the outlet, the airline is offering up to a 43% cumulative weighed average pay raise over two years to its pilots.
Pilots are enjoying immense leverage over airlines as carriers attempt to increase staffing to handle booming air travel demand. Just one week ago, Delta offered its pilots a 34% cumulative pay raise over three years in their new contract.
According to the memo, sent to members on Friday, The pilots’ union said the deal will entail a 43% cumulative weighted average pay raise for the first officer as well as a 25% pay raise for captain over two years. Combined it would work out to a 34% cumulative weighted average increase in wages for Spirit’s pilots.
The union, the Air Line Pilots Association (ALPA) noted that the new contract would provide an overall $463 million in salary increases, or 27% increase over the next two years for its pilots.
Once ratified by the pilots, the deal would take effect on January 1st. The date for the vote has not yet been set. The pilot union hopes to generate support for the deal through planned roadshows between December 14th and 20th.
The deal will also offer increases in training pay as well as higher contributions to 401(k) retirement plans. The ALPA noted it offered “zero concessions” from its pilots. The deal will cover all 3100 Spirit pilots.
Spirit’s pilot union head Ryan Muller said, “This agreement…stands in stark contrast to previous bargaining cycles at Spirit and other large jet carriers, where pilots have endured years of stagnating compensation while negotiating comprehensive pilot contracts.”
Airlines reduced their workforces by thousands during the pandemic. Additional workforce losses occurred when many pilots left their jobs, rather than submit to vaccination mandates. Now, following the pandemic, airlines are seeing a booming demand for air travel, and are struggling to overcome a shortage of qualified pilots as they seek to ramp up their workforces. Together this has greatly enhanced the bargaining power of the pilots in labor negotiations.
Jeffries analysts estimate the United States is roughly 100,000 pilots short of full staffing. They project the gap in supply and demand will last at least until 2027.
Spirit agreed to sell itself to Jet Blue Airways Corp in July for $3.8 billion. If completed, that deal will close no later than the first half of 2024. Although it has been approved by shareholders, it still needs to acquire regulatory approvals.
