United's new pilot contract boosts pay, underscores challenges for regional airlines

United Airlines' pilots could be getting larger paychecks soon.

Union leaders on Friday approved a tentative agreement with United's management that would hike pay by 14.5% over the next 18 months — making United's pilots the best paid among U.S. airlines. Senior captains on the Boeing 777 will make over $400 an hour in base pay — the first time base pilot pay has broken the $400 mark for United or its competitors. It also features eight weeks of paid maternity leave.

The two-year deal now goes for a vote before the 14,000 United pilots who are members of the Air Line Pilots Association. Voting ends on July 15, and approval is not guaranteed. Some rank-and-file pilots have voiced opposition to the agreement, saying the pay increases do not go far enough.

The agreement touches very few items related to regional flying, which falls under what's known as a scope clause. The once hot-button issue regulates the number of regional aircraft that an airline is able to fly based on a number of factors, including the number of mainline aircraft in an airline's fleet. United's scope clause puts various caps on regional aircraft over 50 seats, which is why the airline created the premium seat-heavy CRJ-550, a regional jet that is designed to fit 70 passengers but only holds 50.

While there's little concrete about regional flying in this agreement, there is a strong implication about it: United is rolling out an even larger welcome mat for prospective pilots currently at regional airlines to send in applications, because the airline — assuming the agreement is approved — will boast the industry's best pay. Quality of life improvements granted as part of the agreement — things like increased schedule flexibility — will be icing on the cake.

United — like all major airlines — needs pilots. It was a need that was clear even before the COVID-19 pandemic: with a mandatory retirement age of 65, a large spate of pilot retirements was coming up. But with airlines offering early retirements during the pandemic — and demand coming roaring back this year — the need is more acute than ever. Each week, United welcomes as many as 72 new-hire first officers to its sprawling training center in Denver.

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Many of those pilots come from regional airlines, and it underscores the ongoing primary challenge of the regional airline industry: pilot retention. In recent weeks, the three regional airlines owned by American Airlines — in a bid to retain pilots — have hiked pay so dramatically that some pilots will earn paychecks resembling those of their mainline peers. Some specially trained pilots at two of the airlines will earn as much as $427.50 an hour at times.

Related: Inside United's flight training center — and its battle against the pilot shortage

But most pilots ultimately aspire to head to a mainline carrier. The long-term appeal of flying larger aircraft — coupled with better contracts overall — creates an unbeatable lure. Just ask some of the pilot union leaders at Envoy Air, one of American's wholly-owned regionals. The same pilots who helped negotiate the massive pay increase were already on their way out, according to The Wall Street Journal. Their new employer? United.

For United's CEO, Scott Kirby, it's all part of the plan.

"I think it is a strategic advantage for United, in particular, we're the best place," he said during an earnings call in April. "If you're a pilot, we are the best place to go."