United’s CEO sees pilot deal adding over $8b in costs

United Airlines is offering its pilots a contract with an incremental value in excess of $8b over four years, a figure that would make it the richest deal ever for a mainline US carrier. The company is negotiating weekly as it tries to reach a formal agreement with the union, CEO Scott Kirby said in a wide-ranging interview Monday with Bloomberg News. He didn’t detail the value of the pay, benefits and quality-of-life improvements included in the proposal other than to say that it would top the recent deals agreed to by its two biggest rivals. “We have a deal on our table that would be industry leading,” Kirby said. The labor talks have ratcheted up pressure on United even as it benefits from soaring demand for leisure travel and no signs of a slowdown in trips that mix personal time with work. Kirby reiterated that a “business recession” is keeping corporate travel as much as 25% below 2019 levels, but he said he expects a full recovery. Overall demand is strong enough to withstand even a moderate recession, he said, and nothing short of an “exogenous shock” to the economy will derail it. “It would require something pretty significant — beyond the scope of what anyone has in any other sort of base case scenario,” Kirby said. Carriers are grappling with higher costs, particularly on the labor front. American Airlines Group Inc. reached a preliminary agreement last month that would add $8b in additional costs. That came a couple months after Delta’s aviators approved a new contract with an incremental cost of more than $7b, also over four years. Kirby said United has incorporated expected labor expenses into its guidance despite not having an agreement.<br/>