Pilot Contract Talks Are Tough. Allegiant Pilot Contract Talks Are The Toughest Of Them All

While pilots at most airlines are negotiating new contracts with work rule improvements, Allegiant pilots just want their carrier to assign flights by seniority. While most pilots negotiate how much they will fly in joint ventures with other carriers, Allegiant pilots worry they could lose flying to a new Mexican partner. And while most pilots want to match Delta pay rates, Allegiant pilots just like to think they can get close to Delta.

Not surprisingly, Allegiant “pilots leave the airline at the rate of about one a day,” says Andrew Robles, a 14-year Allegiant pilot who is an A320 captain and president of Local 2118 of the International Brotherhood of Teamsters, which represents about 1,100 Allegiant pilots. “Right now we are the lowest paid in the industry and we are very far apart on work rules that allows pilots to have quality of life,” he said. “We are decades behind the other carriers.”

Allegiant pilots voted to join the Teamsters in 2012. They have negotiated just one contract since then, Robles said, and so are behind other pilot groups in defining wages, benefits and working conditions. “We’ve been in litigation since 2016, trying to get our scheduling system improved,” he said.

The current contract was signed in 2016 and became amendable July 29, 2021. Negotiations are now overseen by the National Mediation Board. ”We’re not close to getting a contract yet,” Robles said.

Under the new Delta contract, a 12-year A320 captain makes about $336 hourly while a two-year A320 first officer makes around $166 hourly. At Allegiant, a 12-year A320 captain makes $232 hourly while a second year first officer makes $96 hourly. “We’re not even close,” Robles said. “Right now we are the lowest paid in the industry. “We’re asking for what our peers make.”

Allegiant has “offered competitive wages — starting with a minimum 35% per hour pay increase for all pilots — that would make our pilots among the highest paid in the industry,” said spokeswoman Sonya Padgett. “Additionally, we have offered a significant increase in retirement benefits, as well as extensive scheduling and quality of life enhancements.” She said the carrier is “committed to the negotiating process through the National Mediation Board and hope our pilots’ union is committed as well.”

A barrier to getting a contract is Allegiant’s apparent unwillingness to honor seniority in scheduling. The Teamsters have won favorable rulings on this issue from a board of arbitrators and from two courts. “We’ve gone back and forth on this in the court system: we’ve gone to court three times,” Robles said, Yet, for a senior pilot, “If the company feels you need to work on a weekend, a junior pilot can get the weekend off,” he said.

The latest favorable ruling for pilots came March 30^th from a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit. The panel reaffirmed rulings by a board of three arbitrators and a district court.

The board of arbitrators “did not exceed its jurisdiction when it found that the terms of the CBA (collective bargaining agreement) require Allegiant to devise schedules sequentially based on seniority,” the court ruled. “The board permissibly interpreted the contract to require that work schedules be assigned based on preferences and in order of pilots’ seniority. Because the arbitrators’ award drew its essence from the contract, we may not substitute our judgment for theirs.”

Padgett said, “We are in full compliance with all arbitrator decisions and court rulings. Allegiant honors seniority when scheduling pilots.” But Robles said. “The company has changed its bidding practices, but they still do not comply with the arbitrator’s ruling.”

Contract talks have been slowed not only by the continuing battle over seniority but also by approximately 4,000 pending grievance cases. Most relate to the seniority dispute, while others relate to pay issues. Grievance hearings are scheduled through the end of 2024, Robles said.

Another issue is that in December 2021 Allegiant and Monterey, Mexico-based low-cost carrier Viva Aerobus filed for a joint venture enabling them to coordinate schedules, sell seats on each other’s flights, and share revenue. Robles said the venture “would allow the airline to offshore our jobs to Mexican pilots, whose salaries are approximately five to six times lower than ours.” He said Allegiant is seeking relief from standard contract language that limits the amount of flying by a foreign carrier in a joint venture.

Padgett said Allegiant pilots would fly up to 62% of incremental new flying. But she noted, “It is important to remember that Viva Aerobus actively operates dozens of scheduled service routes between the US and Mexico while Allegiant operates none. On the day the joint venture would launch, Viva will naturally have significantly more flying than Allegiant. But the new growth is biased toward Allegiant.” As for existing Allegiant routes, she said, “Our pilots will continue to serve our existing routes under the JV.”

Asked why pilots stay at Allegiant, Robles expressed optimism about what the carrier could be. “We have a lot of promise for growth. The company says we are going to grow: on a positive note, the market niche we have is different and there is the ability to grow quickly.”

Additionally, he said, Allegiant pilots are generally home every night. “If we had pay commensurate to our peers and we could be home every night and they responded to seniority, it would be a great place to work,” he said. Allegiant has 21 pilot bases, more than any other carrier. The biggest bases in Las Vegas, Mesa, Ariz., and Sanford, Fla, have 120 to 140 pilots each.

Like most carriers, Allegiant is heavily unionized. But relations with other groups appear less contentious, largely because the carrier does not battle other groups over seniority.

The 500 mechanics and 50 dispatchers and related are Teamster. Allegiant and the dispatchers reached a tentative agreement on a two-year contract this month. Now, Allegiant is seeking an extension on the mechanics’ contract, which becomes amendable in 2025. “We had a decent contract, but now costs are being driven up,” said Joe Ferreira, director of IBT’s airline division. “Now they can’t keep pilots and they can’t keep technicians.”

Also, Allegiant’s 1,800 flight attendants are members of the Transport Workers Union. “We are bargaining now and negotiations are productive,” said TWU spokeswoman Jonna Huseman.

Allegiant shares are up 50% year-to-date, but Bank of America
BAC
analyst Andrew Didora recently downgraded them to underperform, citing lower domestic demand for the industry, high valuation due to the rapid share gain and rising labor costs. “Given ALGT’s purely domestic leisure network, slowing domestic volumes present a risk to ALGT’s revenues with earnings risk compounded by operational hurdles such as pilot hiring and a new fleet type,” Didora wrote in a March 1 report. “ALGT’s below-market pilot compensation has driven attrition in the recent environment of wage inflation,” he said. “At current rates, ALGT’s pilots are paid 38% less than Delta’s new deal. Staffing shortages are coupled with ongoing labor contract negotiations.” He projected a 17.5% gain in second half costs excluding fuel costs.