For the past couple of years, we’ve seen pilots at major US airlines fighting for new contracts. None of them were able to improve their contracts in the first couple of years of the pandemic, given the position airlines were in. However, with a rebound in demand for air travel and a shortage of pilots, the past couple of years have been a great time to negotiate new contracts.
Prior to today, we’ve seen pilots at Alaska Airlines, Delta Air Lines, American Airlines, and United Airlines, all ratify new contracts (in that order). The largest remaining carrier where pilots hadn’t yet ratified a new contract was Southwest Airlines. That has finally changed…
In this post:
Southwest pilots ratify new $12 billion contract
The Southwest Airlines Pilots Association (SWAPA) has just announced that the company’s 11,000 pilots have ratified a new contract that was put out for a vote around a month ago. Specifically, 98.8% of pilots cast votes, and of those, 92.73% voted in favor of the new contract, while 7.27% voted against it.
The new $12 billion contract is valid for five years (through the end of 2028), and provides significant gains in compensation, with incremental pay increases over the next four years. The deal also includes improvements to work rules and flying schedules, better disability coverage, and increases to retirement benefits.
Here’s how SWAPA President Captain Casey Murray describes the new contract:
“This has been a long time coming and it is only through the unity of our pilot group that we were able to achieve the gains in this contract. This new CBA will bring our pilots the security and protections that have been long needed.”
“The implementation of this contract will take some time to get right. But we will work with Southwest to make sure that all of the changes that improve our pilots’ quality of life take place as quickly as possible. I want to offer a sincere thank you to our pilots for their support and backing over the last few years. You are the reason we got here.”
Over the summer, Southwest pilots voted to authorize a strike, as their negotiations weren’t getting anywhere. I’m happy to see that significant progress was made, and that a contract has now been ratified. This should also be a relief for Southwest pilots, as it will avoid any potential strike from that work group.
How much will Southwest pilots be paid?
How lucrative is the new contract that Southwest pilots have approved? Southwest only flies one type of aircraft, the 737, so compensation factors in whether you’re a captain or first officer, plus your years of service.
Note that while most US airlines have hourly pay rates for pilots, Southwest has a unique trip-for-pay scheme. The below table contains trip-for-pay rates, so you’d want to multiply them by 1.149 to determine the hourly pay rate.
With this contract, pilots are getting an immediate pay increase of 29.15%, 4% pay increases in each of 2025, 2026, and 2027, and a 3.25% pay increase in 2028. This translates to roughly 50% pay increases over the course of five years.
Workgroups of course engage in pattern bargaining, so the union was presumably looking at what other carriers managed to negotiate with the contracts that they ratified.
At most airlines, you get paid a bit more as you fly larger aircraft. The challenge for Southwest is that the airline exclusively flies 737s, so there’s no differentiation there. As you might expect, that can be a contentious topic:
- I imagine management thinks that pilots should be paid based on what pilots flying similar aircraft at other airlines are earning, in order to remain competitive
- I imagine pilots would like to be paid more than pilots of comparable planes at other airlines, reflecting their lack of ability to upgrade to larger aircraft
So, what did this contract end up being based on? The captain pay ended up being Delta’s 737 captain pay plus 1%, while the first officer pay ended up being Delta’s 757 first officer pay.
I’ve written in the past about how airline pilots are paid. If you want a rough estimate as to how much annual compensation hourly pay rates translate to, just multiply the hourly pay by 1,000. Most pilots will fly just under 1,000 hours per year, but then also have other opportunities to get paid extra, ranging from per diem, to picking up extra trips with bonus pay, to profit sharing, etc.
So as a very rough estimate (converting trip-for-pay rates into hours), over the course of the contract first officers will earn anywhere from ~$133K on the low end, to ~$295K on the high end, while captains will earn anywhere from ~$334K on the low end, to ~$423K on the high end. Again, there are lots of variables, so some pilots will fall outside those ranges.
Bottom line
Southwest Airlines pilots have just ratified a new contract, after drawn out negotiations. The five year contract is worth $12 billion, and pilots are looking at a nearly 30% pay increase the first year, and a total of a roughly 50% pay increase over five years.
What do you make of the new contract for Southwest pilots?
Let’s hope the folks working on the ground for them receive the same 50% pay raises over 5 years .
Per diem is not “compensation”. It’s a reimbursement for expenses incurred while on the road away from home. Meals, etc.
That scale isn't converted; it's still in TFP. So the annual salary estimate you gave is off by a bit..
I noticed this too! It’s closer to $365 hourly rate.
So assuming the figures are before tax - so about $2400 per day ( based on say 8 hours ) average and more for years of service - I assume allowances and DTA on top of that as well
Airlines are going to need to raise fares. But so far that seems easier said than done.
Thank God! Those poor pilots were really hurting.
I greatly respect the job pilots do. It’s demanding and requires a substantial amount of training. What grinds my gears is when pilots try to portray themselves as the downtrodden.
We aren’t downtrodden. We just want to be paid in line with the skill required to do our job. Nobody ever wants the cheapest lawyer or cheapest brain surgeon when they need one.
There’s also not many pilots out there to support growth after the legacies unintentionally made entry into the career prohibitively expensive via their B scale regional pay scheme. They’re paying the price for that short sightedness now, as market rates have...
We aren’t downtrodden. We just want to be paid in line with the skill required to do our job. Nobody ever wants the cheapest lawyer or cheapest brain surgeon when they need one.
There’s also not many pilots out there to support growth after the legacies unintentionally made entry into the career prohibitively expensive via their B scale regional pay scheme. They’re paying the price for that short sightedness now, as market rates have to go up to entice people to take on 180k in debt just to get started in this career.
Lucky, this must be trips for pay. Southwest's "hour" of pay. Something about one flight from Dallas to Austin. Need to multiply by 1.15 to compute hourly pay.