According to Bounce's 2023 Airline Index, Southwest Airlines is the second-best domestic airline.
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Southwest Airlines and the pilots' union have reached a new preliminary labor agreement, ending months of tense negotiations.
Southwest is the latest of the largest U.S. airlines to strike a deal that will give pilots big pay increases.
The union did not immediately provide details of the pay increases, but the five-year deal is worth about $12 billion, Casey Murray, president of the Southwest Airlines Pilots Association, told CNBC on Tuesday. In comparison: a bigger rival United AirlinesAccording to the pilots' union, the new four-year pilot contract is worth about $10 billion.
Southwest's pilots will have to approve the contract. CNBC reported earlier this month that the two parties were close to a deal.
“We are pleased to have reached an agreement in principle with the Southwest Airlines Pilots Association for Southwest's more than 10,000 pilots,” Southwest said in a statement. “The AIP is an important milestone in the process and we look forward to the next steps.”
AmericanUnited and Delta earlier this year finalized pilot deals worth billions that gave pilots double-digit pay increases. The Covid pandemic derailed negotiations across the sector, halting wage increases in the unionized sector even as demand returned and inflation hit multi-decade highs.
As travel demand slumps, pilots, flight attendants and other airline workers have pushed not only for higher wages but also for better working conditions, such as more predictable schedules.
Southwest pilots and flight attendants have complained about irregular schedules, especially during disruptions. One of the causes of Southwest's vacation crisis last year, which left about 2 million customers stranded, was old software that left crews out of position for rescheduled flights. The US Transportation Department has fined the airline $140 million for its handling of the crisis, it announced on Monday.
Southwest flight attendants recently rejected a tentative agreement in a vote, though the union has said a new vote will be held, citing complaints about technical problems with online voting.
Unions have increased their power throughout the year, producing a series of major labor deals, including deals between Hollywood studios and actors, and the studios and writers, as well as between automakers and the United Auto Workers union. These agreements followed lengthy strikes.