JP Morgan’s Jamie Baker writes in an investor note that the deal United Airlines struck with its pilots union to avoid 3000 furloughs includes giving the pilots first class seats that might have gone to customers as upgrades.
Pilots also achieved permanent, positive-space First Class deadheads, with stand-by eligibility before paying passengers, addressing a union goal dating back at least a decade (and effectively representing a devaluation of frequent flyer Elite benefits that travel bloggers haven’t picked up on ‒ yet)
United pilots got tightened scope restrictions (limits on United Express flying) and a wage increase when the airline returns to profitability in exchange for reducing pilot minimum hours. This way United can keep more pilots on the job and reduce retraining expenses. But it’s the positive space first class deadheading that means fewer first class seats available for customers.
In the near-term this shouldn’t be much of an issue. Premium cabin demand is low enough that as long as United maintains the size of its forward cabins upgrades should be easier than they used to be for a little while. Over time though this means pilots do trump passengers, and that’s not good for passengers who are last in line – elites looking to upgrade.