United Airlines Reaches Labor Agreement with Mechanics Union Worth Nearly 2 Billion

united-airlinesUnited Airlines mechanics have agreed to vote on a new six-year labor agreement that will provide nearly $2 billion in improvements and raise top pay scales considerably.

The union that represents 9,000 mechanics at United Continental Holdings Inc. said it signed off on the terms of a new tentative labor contract and intends to put it out to a membership vote in the coming weeks.

If the agreement is approved by a majority of the workers, it would mark the mechanics’ first joint labor contract since the 2010 merger of United Airlines and Continental Airlines. They would be the final unionized group to cross that threshold, which would represent a victory for new United Chief Executive Oscar Munoz, who has pledged to improve labor relations at the nation’s No. 3 airline by traffic.

The six-year agreement is worth $500 million more to the mechanics than the one they rejected, he said, and it represents $1.7 billion in improvements over the current contracts separately covering United and Continental technicians.

The pact would give the mechanics a $185 million signing bonus and immediately raise top pay scales by 28%, to $47.31 an hour, Mr. Fisher said. About 80% of the workers are senior enough to be at top scale. Overall, wages would rise 36.5% over the term of the contract, and the mechanics would have furlough protection and wage resets if airline rivals’ mechanics move above United’s pay and benefit offerings.

“This contract is industry-leading in every aspect,” the union official said.

United, in a statement, said it was “glad our technicians will have the opportunity to vote for a new contract.”

Source: Wsj