UPS Pilots Hit the Jackpot

FedEx (FDX Quote) and UPS (UPS Quote) may rush to deliver packages quickly, but they obviously felt no urgency to negotiate contracts with their pilots.

That is, until one of the companies made a deal. Once UPS reached a tentative contract agreement in June, after nearly four years of talks, FedEx quickly concluded its negotiations last week, after 29 months.

UPS pilots ratified their contract Thursday, with 56.5% voting in favor. Senior pilots get an immediate 17.7% boost to $258,000 annually, the Independent Pilots Association union said. First officers get immediate increases as high as 26%, bringing average pay for a seven-year first officer to $147,000. Pilots also get annual 3% raises starting in 2008 and a 4% raise in 2012.

Union president Tom Nicholson said UPS will spend $1.5 billion for improved pay and retirement benefits over the life of the contract. However, UPS spokesman Ken Sternad said the company's "own cost models do not show the number to be that high." In any case, Nicholson said the union's top priority was to assure adequate rest in pilot schedules.

"Fundamentally, we looked at shift work," Nicholson said at a news conference. "It does not matter what we get for our pilots if they are completely debilitated in their health."

Pilots also won strong contract language that assures they will fly the company's expanding network of international routes, including routes that do not originate in the U.S., wherever host-country laws permit, Nicholson said