American, US Airways pilots approve contract, a step toward combining workforces after merger

Pilots at American Airlines and US Airways have approved a single labor contract, a step toward combining workforces at the two carriers, which merged in December 2013.

The multiyear deal gives pilots a 23 percent pay raise retroactive to Dec. 2.

The Allied Pilots Association said Friday that the contract was approved 66 percent to 34 percent, with 95 percent of eligible pilots casting a vote.

The outcome could help American avoid some of the labor-integration issues that have dogged other airlines after mergers. United Airlines has a joint contract with pilots but not with mechanics or flight attendants. The pilots at US Airways did not approve a joint contract after the 2005 merger with America West Airlines, forcing the combined carrier to operate with separate crews.

Pilots at American and US Airways will get the retroactive pay raises plus annual raises of 3 percent through 2019. The contract does not include profit-sharing, which pilots get at United, Delta Air Lines and Southwest Airlines.

Keith Wilson, president of the union, said American and US Airways pilots will still trail Delta pilots in total compensation but will benefit from higher pay. "In effect, the pilots of American Airlines made a business decision," he said.

American Airlines Group Inc. reported this week that it earned $597 million in the fourth quarter and $2.9 billion for all of 2014, helped by cheaper jet fuel and higher fares. The company says it could save another $5 billion on fuel this year, thanks to the recent plunge in oil prices.

But labor costs are heading higher.

American estimated this week that if approved, the pilot contract would add $600 million to its costs this year. If pilots had rejected the deal, the dispute would have gone to binding arbitration, which likely would have resulted in no increase in costs, according to the company.

The company also expects that a recent deal with flight attendants will add $200 million to 2015 costs.

Shares of Fort Worth, Texas-based American were down $1.04, or 2 percent, to $51.20 in midday trading.

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David Koenig can be reached at http://twitter.com/airlinewriter