By Shivansh Tiwary
(Reuters) - Southwest Airlines (NYSE:LUV) has reached a tentative five-year agreement with a local unit of the Transport Workers Union that represents nearly 18,000 operations, provisioning, ramp and cargo agents, the company said on Thursday.
The agreement, which is subject to a ratification by the members of TWU 555, includes average pay increase of more than 18% on the date of ratification and a 3% annual wage increase beyond that.
In the past two years, unions representing pilots, flight attendants and maintenance workers have sought higher wages, better scheduling and other benefits against the backdrop of a tight U.S. labor market.
The agreement constitutes a wage rate of $38 per hour at the top of the wage scale, which is 6.6% above United Airlines' current industry leading rate, TWU said.
The deal also allows workers to reach the top of the pay scale after 10 years of service from 11 years currently.
"This tentative agreement provides much needed raises and quality-of-life benefits for our hardworking members at airports across the country," TWU International Executive Vice-President Alex Garcia said in a statement.
Southwest, which is in talks with its cabin crew members, has ratified contracts with nine worker groups since October 2022. The cabin crew members approved a strike mandate in January after rejecting a tentative contract.
Last month, Southwest pilots approved a labor contract, which will offer about a 50% raise over a five-year period.
Bumper pilot contracts have driven up operating costs across major airlines and have also encouraged other groups to demand similar gains.