United Continental Flight Attendants Approve Contract

CHICAGO—After several years of negotiations, a slight majority of the 25,000 flight attendants at United Continental Holdings Inc. on Friday approved a five-year labor contract, the first combined deal covering the group since United Airlines and Continental Airlines merged in 2010, the union said.

The Association of Flight Attendants said more than 90% of the group cast ballots after the deal was put to a vote earlier in the summer, and 53% voted for the pact. The union has said the agreement preserves profit-sharing, maintains health-care plans, provides no-furlough protections and offers top pay rates that exceed that of attendants at American Airlines Group Inc.

For United, the vote was surely a boost. Oscar Munoz, the new chief executive, has said reaching a deal with the attendants was one of his top priorities as he moves to improve labor relations companywide. This leaves only one group, United's 9,000 mechanics, without a postmerger joint agreement.

Mr. Munoz said Friday that when he took the job last year, "I promised to turn the page and write a new chapter in our approach to labor and management relations. What matters is proof, not promises." He said he is proud that the company so far this year has reached ratified contracts with more than 65,000 of its employees.

A vast majority of the United mechanics in February rejected a proposed six-year contract. But that group, represented by the International Brotherhood of Teamsters, is back to the bargaining table and United is hoping a new deal can be crafted soon. American, also a merged company since 2013, recently raised the pay of its mechanics and ramp workers even without a joint contract being completed. This could change the calculus of the United negotiations.

Talks between United and its cabin crew members were protracted. Until this new deal, the former United attendants were limited to staffing United planes and Continental attendants to working on Continental aircraft. That arrangement led to operational inefficiencies that inhibited the two groups from overcoming cultural differences. Their two separate contracts had very different policies on staffing, rest periods and benefits, among other things.

With the flight attendants now settled, that would go a long way toward bringing much-needed labor peace to the nation's No. 3 airline by traffic. But the new deal will raise its costs.

The AFA has said a single pay scale will feature base rates topping out in the 13th year of seniority at $62.00 per hour, which represents an increase of 18% to 31% over the old top rates. The top hourly pay will rise to $67.11 an hour by the end of the five-year term.

Write to Susan Carey at susan.carey@wsj.com

(END) Dow Jones Newswires

August 12, 2016 14:55 ET (18:55 GMT)

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