Pilots at Alaska-owned Horizon Air win huge pay hikes in new contract

The more than 700 pilots at Horizon Air, the lower-wage regional sister carrier to Alaska Airlines, have won a blowout contract that provides stunning pay increases.

Captains will get an average pay hike of 74% while first officers will get a pay raise of 85%, the pilot union announced Friday.

First-year captains at Horizon will jump from earning $81 to $149 an hour, the highest rate at any regional carrier. New-hire first officers now earning $48 an hour leap to $90 an hour.

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

Henry Simkins, a Horizon Air pilot who chairs the executive council of the pilot union, Teamsters Local 1224, said that as news of the deal broke “we had pilots, male and female, shedding tears.”

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

Joe Sprague, president of Horizon Air, said the new contract aims to retain talent as larger carriers continue hiring pilots away from regional airlines like Horizon at record levels. The loss of pilots has forced Horizon to reduce its flight schedule.

“The ongoing industry pilot shortage has put a strain on this service, and it’s more critical than ever that we attract and retain our talented pilots,” Sprague said. “We are focused on making Horizon the regional carrier of choice for pilots, and this agreement positions us well.”

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

For planned growth, Alaska Airlines and Horizon together estimate they need to hire 500 pilots each year through 2025.

Joe Muckle, the union local’s president, said the deal represents “a new era for the industry.”

“A new hire Horizon pilot can finally make a living, afford to raise a family and save for retirement,” Muckle said. “Highly experienced aviators can choose to stay in the regionals for a fulfilling career.”

Alaska Airlines pilots next up?

The astonishing scale of the Horizon Air labor deal is a glimpse of what’s ahead for pilots at Alaska Airlines and across all U.S. carriers.

Pilots at the regionals owned by American Airlines — PSA, Envoy and Piedmont — in June got temporary wage hikes of 50% over the next two years.

That month, the Horizon pilots voted down a tentative agreement and extended negotiations. The deal now finalized provides larger increases than those at the American regionals and the rate hikes are permanent.

And, with the lower-paid regional pilots winning such raises, major U.S. airlines will have to offer correspondingly large wage increases for mainline pilots in order to maintain some differential.

Typically, pilots begin their career at a regional airline, accepting lower pay to build up flight hours so they can graduate to a major for much higher pay.

American, Delta, United, Southwest, Alaska and JetBlue are currently in the midst of intense contract talks with their own pilots. Alaska Airlines has lost pilots defecting to Delta and other majors.

One Alaska Airlines first officer, who asked not to be named because the company disapproves of employees talking to the media, said there are wild numbers floating around but that everyone in the Alaska Airlines pilot community is now expecting a raise of at least 50% in the new contract.

Across-the-board improvements

The Teamsters said 91% of its Local 1224 members voted on the contract, with 99% of those approving the deal.

The contract provides big wage hikes from the bottom to the top of the scale. A senior captain’s pay jumps from $129 an hour now to $215 an hour, or more than $200,000 per year.

The new wage rates apply immediately. The contract includes further 1.5% increases next year and the year after.

And because pilot groups are now negotiating across the airline industry with rapid change in the works, the Horizon contract includes a “me too” clause: If the pilots at the largest regional carrier, SkyWest, negotiate a higher raise anytime in the next two years, Horizon pilots will get an automatic bump up equal to the SkyWest rate plus $1 per hour.

In addition to the wage hikes, the new contract offers enhanced 401(k) retirement benefits. For senior pilots, Horizon will contribute as much as an additional 12% of the pilot’s income toward retirement.

And the contract also adds more pay for instructor pilots, better holiday pay, and improved rules for pilots who must commute by plane to their scheduled flight.

Greg Unterseher, deputy director of the airline division of the Teamsters International, said the contract recovers ground pilots lost in the concessionary contracts agreed to in the industry downturn following the 9/11 terrorist attacks and in the aftermath of the global financial crisis of 2008.

Those contracts had left regional pilots across the industry poorly paid, even though they typically go into serious debt to pay for flight school and qualify to fly.

“This is obviously a monumental leap,” Unterseher said. “This is going to enable people to work here for their career.”

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

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