United Needs More Revenue to Help Pay for Its New Labor Deals
Photo Credit: United is paying its employees a lot more money than it was, and it will need to find a way to recoup those costs. United Airlines / United Airlines
Skift Take
Give credit to United CEO Oscar Munoz for reaching new labor deals with many of United's employee groups. But buying labor peace is expensive. And now United's new executive team needs to come up with some creative ways to offset the increased costs.
United Airlines will need to raise revenues, perhaps by increasing ticket prices, to offset its increased labor costs and help it close its margin gap to Delta Air Lines and American Airlines, United's CFO suggested Monday.
Reaching new contracts with United's unionized workforces was a major priority for Oscar Munoz after he took over a year ago. He has been successful, negotiating successful agreements with pilots, flight attendants and customer service workers. Next could come United's mechanics, who should soon vote on a new tentative agreement.
But all these labor deals are costly. While announcing its third quarter e
