United Airlines Reaches Proposed Two-Year Labor Deal With Pilots

  • Company has worked to improve relations with worker groups
  • Contract extension must be ratified by vote of members

United Continental Holdings Inc. has reached a proposed two-year contract extension with its pilots union, continuing a run of improved labor relations at the airline.

The Air Line Pilots Association on Friday told its members it has reached an “agreement in principle” on an extension with the Chicago-based carrier. If the union’s members approve it, the deal would remove one hurdle as United Chief Executive Officer Oscar Munoz, tries to improve the airline’s operations. Munoz took medical leave last month following a heart attack and is expected back early next year.

The letter from ALPA chief Jay Heppner doesn’t give specifics of the proposed deal, but does say the union’s members expect industry leading compensation, among other improvements. The union’s leadership, or master executive council, could vote on the deal within weeks, after which it could be sent to United’s pilots for a vote.

United has been eager to reach a temporary deal with its pilots, who otherwise could start negotiations on a new contract in May. A United labor executive wrote a letter to Heppner early last month, offering to hold talks on an extension to the current contract over an expedited 45-day period.

United’s letter, written by Senior Vice President Douglas McKeen, also said United would order a fleet of 100-seat jetliners from either Bombardier Inc. or Embraer SA if the two sides could agree on a two-year extension. Airlines often dangle the promise of a new jet order -- which means more jobs for pilots -- as an incentive to approve a labor contract.

Delta Air Lines Inc. had offered to add 60 jets if its pilots approved a tentative agreement last summer, but pilots rejected the deal. When asked Friday if United plans to go ahead with its offer, spokeswoman Megan McCarthy said the company doesn’t discuss its fleet plans.

The proposed pilot deal is the second piece of positive labor news for the company in recent weeks. In late October, United announced a tentative contract agreement with its Teamsters-represented mechanics. The company has yet to reach a contract with its flight attendants, who remain divided between those who started with former United parent UAL Corp. and those who started with the former Continental Airlines.

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