By Rajesh Kumar Singh
CHICAGO (Reuters) -Pilots at Southwest Airlines (NYSE:LUV) will get about a 50% pay raise over a five-year period in their new contract, according to the details shared by their union on Wednesday.
The Southwest Airlines Pilots Association (SWAPA), which represents more than 10,000 pilots at the Dallas-based carrier, also said its board has voted to send the deal to members for a ratification vote.
"The board believes this agreement achieves the goals of the pilot group, provides security for their families, and rewards their industry-leading productivity," the union said.
On Tuesday, the union said it has reached an agreement with the company for a $12-billion contract deal.
The hefty pay increases underscore the bargaining power aviators are enjoying amid an industry-wide shortage. Pilots at rivals United Airlines, Delta Air Lines (NYSE:DAL) and American Airlines (NASDAQ:AAL) have all secured big raises and improvements in working conditions in new contracts.
It has not only driven up operating costs at airlines but also encouraged other work groups to demand similar gains in their contracts.
Southwest pilots will get a 29.15% pay raise immediately after the new contract's ratification and a hike of 4% each in 2025, 2026 and 2027. The agreement provides for a 3.25% gain in wages in 2028.
After the contract ends in December 2028, they will get a 2.5% bonus each year until a new agreement is reached, the union said.
The deal also provides pay protection for pilots who can't fly due to fatigue.
Pilots will vote on the tentative agreement until Jan. 22, it said.