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Will New Labor Deals Bring Budget Blues to Meetings?

As with recent hotel-labor agreements around the country plus a new contract for UPS workers, fresh contracts for more than 45,000 airline pilots may well affect costs around business events.

The union for American Airlines’ pilots announced on August 27 that its 15,000 members have approved a new contract that brings an immediate 21 percent raise plus annual raises that will boost their pay a total of 46 percent by mid-2027. The compensation and benefits for American pilots will be more than $9 billion across the four-year contract.

The deal comes on the heels of a new agreement in July between United Airlines and its 15,000 pilots, and six months after Delta’s 16,000 pilots approved a new contract. The United and American contracts were aided by the terms of the earlier Delta deal, in which pilots will receive $7 billion in compensation and benefits across that four-year contract.

In fact, American pilots were close to ratifying a contract in late July before the terms of the United deal became public. The United contract delivers nearly $10 billion in compensation and benefits over its lifespan, which caused American’s pilots union to step back from a proposed contract in order to seek additional concessions, which they received to the tune of another $1 billion.

The other major airline in the United States, Southwest, is in federal mediation with its pilots’ union over the terms of a new contract.

What It All Means for Meetings
Other notable labor agreements that have been completed recently include those between convention centers and employees in Las Vegas and Orlando, and between hotels and employees in the suburbs of Philadelphia and New York. Meanwhile, more than 60 hotels in Los Angeles are in contract talks with striking union employees who seek an immediate $5-per-hour raise plus another 20-percent cumulative raise over four years. Then there’s the new contract agreement for workers at delivery company UPS, which handles a huge amount of meetings-related goods. Employee pay at the company will rise by more than $10 per hour over the five-year deal.

The bottom line: The costs of these agreements likely will be reflected in higher prices for meeting hosts, attendees, sponsors, and exhibitors. In the case of the airlines, they say that the new pilot contracts will result in a roughly five-percent increase in their cost per available seat mile, a key industry metric.

While planners have some ability to negotiate with many of their suppliers on event costs, rising airfares might be one area where budgets will simply need to be adjusted to reflect the new reality.

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