Alaska-owned Horizon Air pilots win huge raises on new contracts

The more than 700 pilots at Horizon Air, Alaska Airlines’ regional low-wage sister company, have won a blowout contract that offers staggering pay increases.

Captains will get an average pay rise of 74%, while first officers will get an 85% pay rise, the pilots’ union announced on Friday.

First-year captains at Horizon will go from $81 to $149 an hour, the highest rate of any regional airline. Newly hired First Officers, now making $48 an hour, increase to $90 an hour.

Based on an average of about 950 hours per year, a captain’s salary increases from about $77,000 to $142,000 in the first year. A new first officer’s salary nearly doubles, from $46,000 to $86,000.

Henry Simkins, a Horizon Air pilot and chairman of the executive council of the Teamsters Local 1224 pilots’ union, said when news of the deal broke, “we had pilots, male and female, in tears.”

“They are thrilled. We had pilots who sold cars to afford food. We’ve had pilots who couldn’t afford to pay their spouse’s medical bills,” Simkins said. “This is life changing.”

Horizon Air President Joe Sprague said the new deal is aimed at retaining talent as larger airlines continue to hire record numbers of pilots from regional carriers like Horizon. The loss of pilots has forced Horizon to reduce its flight schedule.

“The continued shortage of pilots in the industry has weighed on this service and it is more important than ever that we attract and retain our talented pilots,” Sprague said. “We are focused on making Horizon the regional airline of choice for pilots and this agreement positions us well.”

The new collective agreement will complement other efforts by Horizon to expand and diversify the pilot pipeline through investments in pilot training and development.

For projected growth, Alaska Airlines and Horizon jointly estimate that they will need to hire 500 pilots each year through 2025.

Joe Muckle, the union’s chairman, said the deal represented “a new era for the industry”.

“A newly hired Horizon pilot can finally make a living, afford to raise a family and save for retirement,” Muckle said. “Very experienced Airmen may choose to remain in the Regionals for a fulfilling career.”

Alaska Airlines pilots next?

The staggering magnitude of the work deal with Horizon Air gives a glimpse of what lies ahead for pilots on Alaska Airlines and all US airlines.

Pilots on American Airlines’ regional flights — PSA, Envoy and Piedmont — received temporary pay increases of 50% over the next two years in June.

That month, Horizon pilots voted against a tentative agreement and extended negotiations. The deal now in place calls for larger hikes than America’s regionals, and the rate hikes are permanent.

And since the lower-paid regional pilots get such raises, major US airlines must offer correspondingly large raises for mainline pilots to maintain some differential.

Typically, pilots start their careers with a regional airline, accepting a lower salary to build up flying hours so they can pursue college for a much higher salary.

American, Delta, United, Southwest, Alaska and JetBlue are currently in intensive contract discussions with their own pilots. Alaska Airlines has lost pilots who defected to Delta and other majors.

An Alaska Airlines first officer, who asked not to be named because the company frowns on employees speaking to the media, said wild numbers are floating around but that everyone in the Alaska Airlines pilot community is now in need of a raise the new contract expects at least 50%.

General improvements

The Teamsters said 91% of their Local 1224 members voted in favor of the deal, with 99% of them approving the deal.

The contract provides for large wage increases from the bottom up the scale. A senior captain’s wage increases from $129 an hour to $215 an hour, or more than $200,000 a year.

The new wage rates are effective immediately. The contract includes a further 1.5% increases over the next year and the year after.

And because pilot groups are now negotiating rapidly changing jobs across the airline industry, the Horizon contract includes a “me too” clause: If pilots at the largest regional airline, SkyWest, negotiate a higher pay rise at any time over the next two years, Horizon pilots receive an automatic top-up equal to the SkyWest fare plus $1 per hour.

In addition to the pay increases, the new contract offers enhanced 401(k) benefits. For experienced pilots, Horizon contributes up to 12% of the pilot’s earnings on top of retirement.

And the deal also includes higher salaries for flight instructors, better vacation pay and improved rules for pilots who have to commute by plane to their scheduled flight.

Greg Unterseher, deputy director of Teamsters International’s airline division, said the contract will regain ground pilots who were lost in the concession contracts agreed in the industry downturn following the September 11 terrorist attacks and the aftermath of the 2008 global financial crisis.

These contracts had resulted in regional pilots being poorly paid across the industry, although they typically borrow heavily to pay for flight school and qualify to fly.

“Of course that’s a monumental leap,” said Unterseher. “That will allow people to work here for their careers.”

“We have people who live in their parents’ houses when they get hired at Horizon because they can’t afford the rents,” he said, adding that “$40,000 or $50,000 a year doesn’t go very far when you have $150,000 or $100,000 in student debt.

“It’s a huge leap forward for people’s quality of life,” said Unterseher.

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