Allegiant Air's pilots ratify new contract

(Reuters) - Allegiant Air said its pilots represented by the Teamsters union ratified a new five-year contract, ending labor issues at the Las Vegas-based budget carrier at a time the U.S. airline industry is grappling with a shortage of pilots.

A McDonnell Douglas MD-80 series passenger jet belonging to Allegiant Air lands at the Ogden-Hinckley Airport in Ogden, Utah, March 11, 2013. REUTERS/Jim Urquhart

The contract, effective Monday, offers pilots a pay hike of up to 31 percent, paid vacation of up to four weeks, an improved scheduling system and a massive increase jump in the company's 401(k) contributions. (

More than 86 percent of the votes from pilots were in favor of the contract, the airline said on Thursday.

Allegiant Air, owned by Allegiant Travel Co ALGT.O, had 625 full-time pilots at the end of 2015.

The U.S. airline industry has been facing a pilot crunch after the Federal Aviation Administration ruled in 2013 that co-pilots must train for a minimum of 1,500 hours to qualify to fly a passenger or cargo plane.

The previous requirement was 250 hours.

This has significantly pushed up the cost of training for aspiring pilots at a time of slow salary growth.

Regional carrier Republic Airways Holdings Inc RJETQ.PK filed for bankruptcy in February, blaming several quarters of falling revenue after having to ground aircraft amid a pilot shortage.

Allegiant Air had been in unsuccessful talks with its pilots for years.

The pilots had accused the airline of failing to abide by a 2014 federal court injunction directing it to restore their benefits and work-rule protections to levels negotiated earlier.

Last year, the pilots even threatened to go on a strike but a U.S. court blocked them from taking action.

United Continental Holdings Inc's UAL.N pilots voted in January to approve a two-year contract extension, paving the way for a 22 percent wage hike by 2018.

Reporting by Radhika Rukmangadhan in Bengaluru; Editing by Kirti Pandey