American Airlines CEO vows to improve pilot pay as wages at other carriers rise

American Airlines CEO Robert Isom said this week that the company will revise its pay proposals for its 14,000 pilots, acknowledging pay standards have increased since the company made its most recent offer before the pandemic.

The Fort Worth, Texas-based airline had previously floated a 4% date-of-signing increase plus 3% annual raises after that. Then Covid-19 roiled the industry and put talks between carriers and labor unions throughout the industry on hold.

“It was industry-leading at the time we proposed it,” Isom said in a video message to pilots posted Monday, which CNBC reviewed. “As the pandemic wanes, the standard for compensation has gone up.”

Isom’s message came days after two of American’s subsidiaries, regional carriers Piedmont and Envoy, extended big raises to its pilots, including a temporary 50% pay hike through the end of August 2024, in hopes of easing a pilot shortage that has curbed growth plans.

United Airlines last month became the first major carrier in the pandemic to reach a contract deal with its pilots’ union, the Air Line Pilots Association. Union leadership is set to vote on that agreement next week. If passed, it will go to pilots for a vote.

“We will take other carriers’ ratified agreements, including United’s, into account and update our pay proposals quickly when details are known,” Isom said. “Our team will be paid well and be paid competitively. You are not going to fall behind network peers.”

American’s pilots and those at other carriers, including Delta’s, have picketed in recent months to protest the grueling schedules airlines have sold to capitalize on the rebound in travel demand.

Dennis Tajer, spokesman for the Allied Pilots Association, American’s pilots’ union, said the company has to do more than raise wages.

“There is no work-life balance,” he said Wednesday.

Without providing details, Isom said American’s new proposal will include better benefits and quality-of-life provisions.