United Airlines CEO says Delta deal will help airlines get deals done

Scott Kirby, United Airlines CEO, said the tentative contract between Delta Air Lines and its pilots will help all major carriers get deals done on the same terms. A 34% cumulative pay increase over three years, including an immediate raise of at least 18% on the date the contract is signed, was offered by Delta pilots, represented by the Air Line Pilots Association ALPA, and who pledged to strike if a new deal isn't ratified.

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

Kirby told Reuters Monday that the news is that it means we'll get deals done essentially on the same terms and can move forward.

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

He told the outlet that the cost convergence in the industry means that all low-cost carriers are going to have come up with higher pay rates, which is the biggest news for an investor perspective.

This is going to wind up like oil prices and it's going to be a pass through. He added.

The pilot unions rejected proposed contracts from American and United Airlines last month.

The Allied Pilots Association APA, representing American Airlines pilots, said in early November that it rejected a proposed agreement that would have offered a raise of 19% over the two years.

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

The pilots of United Airlines rejected a tentative agreement announced in June. The airline offered more than 14.5% cumulative pay increases, as well as enhanced overtime and training pay. The proposed agreement fell short of the industry-leading contract United pilots earned and deserve, according to the union.

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

He said about a quarter of the Delta's proposed deal is about repairing those fundamental maladies.

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 than there are jobs available. In the last 12 months, 9,397 new commercial airline pilot certificates have been issued, exceeding airline analyst forecasts and airline pilot demand, according to the Federal Aviation Administration.