United Airlines reaches contracts with better pay for 30,000 ground workers

FILE PHOTO: Passengers wait to check-in at the United Airlines ticket counter at Phoenix Sky Harbor International Airport

(Reuters) -United Airlines Holdings Inc CEO Scott Kirby said on Wednesday the carrier has reached an agreement in principle with a workers union over new contracts that include higher wages for its nearly 30,000 ground workers.

Shares of the airline rose 2.1% in afternoon trade.

The detailed terms of the two-year contracts were not disclosed but the International Association of Machinists and Aerospace Workers (IAM) said it offers “industry-best” wage rates, better job security, insourcing of five previously outsourced locations and prohibiting outsourcing at 17 additional U.S. locations.

The pacts come as airlines strive to retain workers with attractive pay and benefits after a faster-than-expected rebound in U.S. travel demand following the pandemic triggered a shortage.

Members covered by the tentative agreements would get more details, the union said in a statement, adding that a ratification vote would be scheduled shortly.

The agreements cover seven different work classifications at United Airlines, including fleet service workers, passenger service workers, storekeepers, central load planners, maintenance instructors, fleet technical instructors and security officers.

United is also separately locked in negotiations with its pilots over a new contract, with U.S. carriers under pressure to improve terms after Delta Air Lines Inc’s pilot deal provided for a 34% cumulative pay increase and other benefits.

(Reporting by Nathan Gomes in Bengaluru; Editing by Shweta Agarwal and Devika Syamnath)