It’s been more than a year and a half since contract negotiations began between Hawaiian Airlines and its pilots.
Friday night saw a major breakthrough, as both the airline and representatives with the pilots union approved a tentative agreement that will now be reviewed by the airlines’ 665 pilots.
If ratified, the contract would last five years and three months — from April 1, 2017 through July 1, 2022.
Highlights, as outlined by the union, include significant pay increases: between 20 and 45 percent in the first year, with a 36- to 86-percent increase over the course of the agreement.
They’ll also receive retroactive payments. Hawaiian Airlines would pay $42 million in back payments.
The agreement also calls for a protected retiree health plan by establishing a trust, with Hawaiian contributing $240,000 for each retired pilot to use for medical expenses.
A membership ratification vote will be held March 6-24 via Internet and telephone.
So what does this mean for Hawaiian Airlines passengers?
Aviation analyst Peter Forman says the pay raise would put Hawaiian Airlines pilots in line with pilots for the other major airlines.
“What’s happened is two things. The airlines has gone from losing money years back to making a lot of money now. That’s part of the equation,” Forman said. “The other equation is we’ve gone from enough pilots to a real pilot shortage.”
But, Forman says, he does not expect Hawaiian to raise airfares or at least anything substantial unless other airlines raise fares also.
“If you even priced it into a typical flight, you’re talking about less than a dollar per ticket. Even if the price was put into the ticket, you wouldn’t see much of a difference,” Forman said. “Ticket prices are usually dictated by the market rather than by the actual cost structure of the airline.”
Forman says it could hurt the stock for the airline, but customers should not be worried having to pay much more to fly Hawaiian.
“I am pleased that we have been able to reach an agreement that offers our pilots a significant increase in compensation,” said Jon Snook, Hawaiian’s chief operating officer and the company’s lead negotiator.