American Airlines reportedly prepared to increase pilot pay rates following Delta's new contract

American Airlines pilots could see a 40% increase in pay in the fourth year of a contract

American Airlines is reportedly preparing to offer its pilots similar benefits recently announced by rival Delta Air Lines.

On Tuesday, Reuters reported that American Airlines CEO Robert Isom told pilots that matching Delta's new offerings will result in a contract worth more than $7 billion for them through increased pay rates and profit sharing.

Isom told the outlet the new deal would be a "game changer" for pilots flying for American.

To match Delta's deal, which went into effect last Thursday, Isom said American pilots would receive an average pay increase of 21% in the first year of the contract – total pay increases in the fourth year would be 40%.

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Last Wednesday, Delta's 15,000 pilots approved of an agreement that would result in a 34% increase in pay raises over four years, ultimately costing the company around $7 billion. 

The Atlanta-based carrier also offered a lump-sum one-time payment, reduced health insurance premiums and improvements in holiday pay, vacation, company contributions to 401 (k) and work rules.

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The new contract is expected to be the benchmark for negotiations at rival carriers. 

"This industry-leading contract is the direct result of the Delta pilots’ unity and resolve," Darren Hartmann, a pilot and union official who chairs the Delta Master Executive Council, said in a release last week. "Despite a two-year delay in negotiations due to COVID, we never lost sight of our goal to obtain significant across-the-board enhancements to our pilot working agreement."

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American Airlines did not immediately respond to Fox Business' request for more information.

Fox Business' Eric Revell contributed to this report

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