United Airlines shares move higher after labor deal reached with pilots

Investing.com -- United Airlines Holdings (NASDAQ:UAL) shares rose on Monday after the U.S. carrier reached a labor deal over the weekend with its pilots that will see the workers receive a significant jump in pay.

The agreement will see the pilots receive a cumulative pay bump of 34.5% to 40.2% as part of a new four-year contract, according to the Air Line Pilots Association, the world's biggest airline pilot union.

The new deal will also see improvements in job security, retirement, vacation, and other benefits. A surge in post-pandemic travel demand, as well as worries over a shortage of pilots in the U.S., helped boost the strength of the group's negotiating position.

In a statement on the social media site LinkedIn, United Chief Executive Scott Kirby said that the four-year agreement "will deliver a meaningful pay raise and quality of life improvements for our pilots."

"We promised our world-class pilots the industry-leading contract they deserve, and we’re pleased to have reached an agreement with ALPA on it," Kirby wrote.

The announcement comes after United rival Delta Air Lines (NYSE:DAL) ratified in March a revised contract that includes more than $7 billion in pay increases for pilots. The accord is expected to become a benchmark used in future labor negotiations.