Virgin America, Alaska Airlines pilots win big pay increases, more retirement benefits following arbitration
By Andrew McIntosh – Staff Writer, Puget Sound Business Journal
Pilots for Alaska Airlines and Virgin America have won significant increases in pay and retirement benefits from Alaska Air Group Inc. following recent arbitration hearings.
A three-person arbitration panel awarded the pilots pay increases above what Alaska Airlines management sought, but below the pay rates sought by the pilots' union.
For a senior Alaska captain, for example, the deal pushes the salary from $216 an hour to $251 an hour — a jump of 16 percent — effective Nov.1. The rate moves higher after that, documents show.
For a senior Virgin America pilot, the pay boosts are even greater. That airline's pilots were paid much less than Alaska counterparts prior to the takeover.
Pay for a senior Virgin America captain, for example, rises from $189 an hour to $251, a jump of almost 33 percent.
Pay for all senior captains will rise to $258 an hour in April 2018, and $266 an hour in April 2019.
"Virgin America pilots did really well on this," said one aviation industry source familiar with details of the arbitrators' ruling who spoke on condition of anonymity to avoid harming business relationships.
The deal also includes improvements to retirement plan contributions for pilots and first officers without a defined benefit plan.
However, the pilots' union lost its bid to stop the company from flying bigger regional jets.
"That was a win for Alaska," the industry source said, adding that the arbitration outcome seemed fair to the pilots' union and the employer.
Alaska's $2.6 billion takeover of Virgin America allowed the pilots to reopen compensation clauses in their contracts, but pressure to pay pilots more comes at a tough time for the airline.
Alaska just suffered an earnings miss last week after costs, pushed by fuel price increases, soared. Alaska was also hit by a airfare price war in California and its executives shared their frustrations and anxiety on an earnings call.
The pilots, who are represented by the Air Line Pilots' Association (ALPA), went into arbitration at the end of August after pilots picketed Alaska Airlines at Sea-Tac Airport. ALPA represents 2,700 pilots at Alaska and Virgin America.
Despite the hefty pay increases, ALPA's Seattle office issued a statement Tuesday suggesting Alaska pilots remain "disappointed and frustrated."
“While the arbitrators’ decision does include what, under most circumstances, would be considered significant raises, it still leaves the combined pilot group well behind our peers at other successful airlines," said Capt. Chris Notaro, who chairs the combined group of pilots for Alaska and Virgin.
For that reason, he said, the pilots are concerned about the airlines’ ability to attract and retain the pilots they need.
“We remain disappointed and frustrated that Alaska management failed to negotiate an industry-standard contract," Notaro said, "and instead relied on a third party to issue a decision with respect to our first contract as a combined pilot group."
Senior captains of Delta Air Lines, United, and American Airlines all make more than senior Alaska captains. Pay for the senior pilots at those three major carriers ranges from $302 to $328 an hour, according to salary data on airlinepilotcentral.com.
Alaska Airlines spokeswoman Bobbie Egan said the airline respects the arbitrators' decision.
"Our commitment is to keep our company strong with low costs, low fares, and great experience for our guests while paying competitively. It is a delicate balance," Egan said. "We have an amazing group of professional pilots who keep our people and passengers safe each day."