United Airlines CEO says proposed Delta contract could set benchmark for other carriers

United Airlines CEO Scott Kirby said the tentative contract between competitor Delta Air Lines and its pilots will help all major carriers "get deals done on the same terms." 

On Friday, Delta offered its pilots, represented by the Air Line Pilots Association (ALPA) — and who vowed to strike if a new deal isn't ratified — a 34% cumulative pay increase over three years, including an immediate raise of at least 18% on the date the contract is signed, according to Reuters. 

The deal hasn't been approved by the union yet. But if it is, the contract could set the standard for competing carriers who are also in the midst of contract negotiations with their pilot unions. 

DELTA AIR LINES OFFERS PILOTS A NEW CONTRACT AS POTENTIAL STRIKE LOOMS

"The really good news is it means we'll all get deals done essentially on the same terms and can move forward," Kirby told Reuters Monday. 

He noted that pilot wages will be pushed up industry-wide and therefore so will airfares for travelers. 

"The biggest news for an investor perspective is cost convergence in the industry means that what is different now is all the low-cost carriers are going to have come up to these much higher pay rates," he told the outlet. 

"This is going to wind up like oil prices — it's going to be a pass through." he added. 

DELTA PILOTS OPEN VOTING FOR STRIKE AUTHORIZATION AS CONTRACT NEGOTIATIONS FALTER

However, pilot unions have rejected proposed contracts from American and United Airlines last month. 

The Allied Pilots Association (APA) which represents American Airlines pilots, said in early November that its board of directors rejected a proposed agreement that would have offered a raise of about 19% over two years.

Ticker	Security	Last	Change	Change %
DAL	DELTA AIR LINES INC.	56.89	-1.50	-2.57%
UAL	UNITED AIRLINES HOLDINGS INC.	77.25	-3.21	-3.99%
AAL	AMERICAN AIRLINES GROUP INC.	12.99	-0.55	-4.06%

APA spokesperson Dennis Tajer told FOX Business the proposed tentative agreement failed to meet membership’s contract goals.

"American management has done very little to address contract provisions regarding schedule reliability and instead focused more on keeping mainline pilots’ pay increases as low as possible," Tajer said.

ALASKA AIRLINES PILOTS TO RECEIVE PAY BUMP, INCREASED SCHEDULE FLEXIBILITY UNDER NEW RATIFIED CONTRACT

Just before that, United Airlines pilots overwhelmingly rejected a tentative agreement announced in June. The airline had offered more than 14.5% cumulative pay increases and enhanced overtime and training pay. However, the proposed agreement fell short of the industry-leading contract United pilots earned and deserve, the union said. 

"It’s more than just the money, pilots across the industry are demanding a work-life balance and for respect and certainty of their schedules," Tajer told FOX Business Tuesday. 

About one quarter of the Delta's latest proposed deal "is repairing those fundamental maladies," he said. 

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ALPA said last month that the U.S. is producing a record number of certificated airline pilots this year, with more pilots in the market today than there are jobs available. According to the Federal Aviation Administration, 9,397 new commercial airline pilot certificates have been issued in the last 12 months, exceeding airline analyst forecasts and airline pilot demand.