By Rajesh Kumar Singh
CHICAGO (Reuters) - Negotiators for pilots at Southwest Airlines (NYSE:LUV) have reached an agreement in principle with the company for a new five-year contract worth $12 billion, the union said on Tuesday, adding that its board still needs to decide whether to send the deal to members for a ratification vote.
The Southwest Airlines Pilots Association (SWAPA), which represents more than 10,000 pilots at the Dallas-based carrier, did not provide details of the deal. The union later said it was worth $12 billion over five years.
Casey Murray, SWAPA's president, said the union's board will meet on Wednesday to evaluate the deal and decide whether to send it to the pilots for a ratification vote.
Southwest and its pilots have been in negotiations for a new contract for more than three years and in federal mediation since September 2022. The last contract ended in 2020.
The pilots have been demanding higher pay and better work rules.
Union officials said the delay in getting a new contract has driven up attrition rates at the carrier, with hundreds of pilots leaving for rival airlines.
An industry-wide shortage of pilots has left U.S. airlines scrambling to hire and retain talent, bolstering pilots' bargaining power.
Pilots at United Airlines, Delta Air Lines (NYSE:DAL) and American Airlines (NASDAQ:AAL) have all secured hefty pay raises and improvements in working conditions in new contracts.
Post-pandemic labor shortages and high inflation have emboldened workers and their unions to use strikes, strategic walkouts and pickets to extract concessions across auto, airline, entertainment and healthcare industries.