American Airlines chief executive Robert Isom is drawing rare praise from union leaders as PSA Airlines, one of the carrier’s wholly owned regional affiliates, secures a compensation package that boosts pay for flight crews by as much as 50 percent, signaling a fresh phase in the struggle for labor and talent across the U.S. aviation sector.
American’s Regional Network Pushes Industry Pay Boundaries
The latest deal at PSA Airlines, which provides a 30 to 50 percent jump in overall compensation for flight attendants and includes earlier 50 percent pay premiums for pilots, underscores how American Airlines is using its regional network to reset the economics of work in the cockpit and cabin. PSA, Envoy and Piedmont together form the backbone of American’s feeder system, operating thousands of daily departures that connect smaller U.S. communities to major hubs such as Charlotte and Dallas–Fort Worth. As the industry emerges from the pandemic, those regional routes have become a pressure point in the race to recruit and retain qualified crews.
American’s strategy has centered on layered incentives: permanent wage-scale improvements paired with substantial temporary premiums that, at their peak, amount to roughly a 50 percent boost to hourly pay for pilots at its regional affiliates. In PSA’s case, earlier agreements with the Air Line Pilots Association created regional industry-leading rates and then stacked an additional 50 percent premium on top for more than two years, dramatically lifting take-home pay for both new hires and experienced captains. That framework is now being echoed on the flight attendant side, where a tentative three-year agreement delivers double-digit raises, boarding pay and retroactive compensation.
By effectively turning its wholly owned regionals into compensation leaders, American is hoping to stabilize a part of its network that was stretched thin by a nationwide pilot shortage and heavy poaching from competitors. For many small and mid-sized U.S. cities, the outcome of these labor deals is directly tied to whether they retain robust air service, since regional carriers operate the bulk of flights into large hubs and are often the only link to the national network.
The financial implications are significant. Labor ranks alongside fuel as one of an airline’s largest expenses, and accelerated pay growth at the regional level is arriving just as mainline pilots at the largest U.S. carriers, including American, Delta and United, secure their own multibillion-dollar contracts. Yet for now, the carrier appears to be betting that higher upfront costs will be offset by reduced training churn, fewer cancelled flights and stronger schedule reliability across its domestic system.
Robert Isom Wins Unusual Union Praise
The PSA flight attendant deal has put Robert Isom in an uncommon position for a legacy airline CEO: being publicly applauded by a major union leader even as labor tensions simmer elsewhere in his company. In announcing the tentative agreement, Association of Flight Attendants president Sara Nelson singled out Isom for engaging directly to close the gap, describing his involvement as evidence of a “longstanding commitment” to frontline workers. That tone is notable given that the union representing mainline American Airlines flight attendants has recently called for Isom’s ouster over stalled contract talks.
Nelson contrasted American’s approach favorably with that of other large carriers where flight attendant negotiations remain contentious, implicitly casting PSA’s agreement as proof that sizable compensation gains are achievable when management is willing to put more money on the table. The contract delivers an immediate 10 percent wage increase for PSA flight attendants, new boarding pay that effectively lifts hourly earnings by an additional mid-teens percentage, and longer-term scale increases that push the full value of the deal toward a 30 to 50 percent compensation boost over its three-year life.
For Isom, who took over as CEO of American Airlines Group and its mainline carrier in March 2022, the optics are complex. On one hand, his willingness to allow regional units room to negotiate aggressive raises helps secure essential staffing and burnishes his reputation with parts of organized labor. On the other, the disparity between progress at subsidiaries like PSA and the impasse with American’s own flight attendants risks fueling internal comparisons and pressure as mainline workers watch their regional peers move ahead.
Industry observers say the PSA outcome is an example of how Isom has tried to calibrate a pragmatic approach to labor relations in the post-pandemic era. He has already signaled a readiness to match or exceed benchmark pilot pay rates set by Delta at the mainline level, indicating that American sees labor peace and operational stability as prerequisites for competing effectively on schedule breadth and reliability. The question now is whether the goodwill generated in Dayton and Charlotte can be replicated in the much larger and more expensive talks still underway.
Inside PSA’s 50 Percent Boost: From Pilots to Flight Attendants
PSA’s compensation story is unfolding in two intertwined chapters: a transformative pilot package agreed in 2022 and a newly announced flight attendant framework in early 2026. For pilots, an agreement with the Air Line Pilots Association restructured wage scales to put PSA at the top of the regional industry, with pay that on average ran more than 50 percent above the prior leading carrier. Crucially, that deal layered an additional 50 percent pay premium on top of already elevated rates for an extended period, meaning that for more than two years many pilots effectively earned time-and-a-half on every scheduled hour.
The impact of those changes was immediate. New-hire first officers saw their hourly pay climb to levels once reserved for mid-career pilots at larger airlines, while experienced captains could reach annual earnings that rival some narrow-body positions at mainline carriers. The agreement also bolstered instructor pay and guaranteed that pilots who did not transition to American within a set period would move to top-of-scale captain rates at PSA, further anchoring total compensation at historically high levels.
The tentative contract for flight attendants builds on that foundation, mirroring the scale of the pilot package even if its structure differs. An upfront 10 percent raise is paired with boarding pay that compensates crews for the time passengers are on the aircraft before departure, a long-standing priority for cabin crew organizations. When combined with scheduled wage-step increases, quality-of-life improvements and retroactive pay, union leaders estimate that many PSA flight attendants will see overall compensation rise between 30 and 50 percent over the life of the agreement.
Taken together, the pilot and flight attendant deals effectively reposition PSA from a cost-focused regional carrier to a standard setter whose pay scales and work rules are now used by unions as leverage in talks with other airlines. That shift reflects a broader recalibration of how much value is placed on the highly skilled labor that keeps regional aircraft operating, a trend accelerated by the pilot shortage that emerged as the industry rebuilt capacity after the worst of the pandemic.
Regional Carriers at the Center of America’s Pilot Shortage
The scale of PSA’s pay increases cannot be understood without looking at the acute staffing crisis that engulfed U.S. regional airlines beginning in 2021. As demand snapped back more quickly than expected, carriers suddenly found themselves short of qualified pilots after years in which entry-level wages had lagged the cost of training and thousands of experienced aviators had accepted early retirement packages. Regional airlines bore the brunt, as their pilots were poached by mainline and cargo operators offering higher pay and more stable schedules.
American’s trio of wholly owned regionals, including PSA, faced mounting attrition just as the mainline carrier was depending heavily on them to restore connectivity to smaller markets. In response, management and unions crafted a series of aggressive deals that temporarily leapfrogged pay at competitors. Piedmont and Envoy, two sister carriers to PSA, also implemented contracts that nearly doubled some starting captain rates and added a 50 percent premium to hourly pay, boosting compensation to levels that would have been unthinkable a decade earlier.
These moves were not merely a gesture of goodwill. For American, every pilot who left a regional operation for a rival meant lost flying and potential schedule cuts in communities where the airline might be the sole provider of commercial service. By making its regionals among the best-paying stepping stones in the industry, American sought to stem that outflow and keep more pilots within its ecosystem, relying on “flow-through” programs that transition regional aviators to mainline jobs once they reach certain seniority milestones.
Even with richer contracts, the regional sector remains vulnerable. Industry analysts note that many of the largest pay boosts are governed by letters of agreement with sunset dates in the second half of this decade. The durability of PSA’s 50 percent pilot premium, and whether the company and its unions choose to make such enhancements permanent or renegotiate them, will be a key test of how far the industry’s new compensation norms will stretch once the staffing crisis eases.
How PSA’s Deal Shapes the Wider U.S. Aviation Labor Landscape
PSA’s compensation gains are reverberating far beyond Dayton and Charlotte. In recent years, unions at other regional airlines, including Republic Airways, Mesa Airlines and CommutAir, have secured sizable raises that they explicitly frame as catching up to or building on the American regionals’ template. In some cases, first officers have received pay hikes in the range of 70 to 90 percent, while captains have secured raises above 50 percent as competitive pressure ripples across the sector.
At the same time, mainline pilots at the largest U.S. carriers have ratified contracts worth tens of billions of dollars in aggregate, with cumulative raises that approach or exceed 40 percent over their terms. While those deals operate on a different economic scale, the negotiating dynamics are similar: after years in which wages stagnated relative to profits, labor groups are leveraging tight labor markets and robust travel demand to reset their share of the industry’s revenue.
Within this broader wave, PSA’s latest agreement with its flight attendants stands out for its explicit linkage between regional and mainline bargaining. By securing a shorter three-year term and prominent non-wage improvements like schedule flexibility and quality-of-life protections, the Association of Flight Attendants has highlighted that it expects to return to the table relatively soon, potentially in a different economic environment. That stance sends a message to airlines across the country that the current upswing in labor leverage may not be a one-time event but rather the start of more frequent and assertive contract cycles.
For American Airlines, the outcome could prove double-edged. If PSA’s terms become a de facto industry benchmark, rivals may be forced to raise their own offers, leveling the playing field but driving up systemwide labor costs. Conversely, if American were to insist on rolling back temporary pay premiums at PSA and its other regionals while competitors lock in higher rates, the carrier could again find itself on the defensive in the fight for talent.
Travelers, Fares and the Cost of Labor
For travelers, the immediate impact of PSA’s enhanced pay packages is likely to be felt less in ticket prices than in the stability and availability of flights. When regional airlines lack pilots or cabin crews, the first casualty is often service to smaller cities that rely on 50 to 76-seat jets to connect to the national network. By cutting down on staff shortages, PSA and its sister carriers can maintain more consistent schedules, reducing last-minute cancellations that strand passengers and erode trust in the brand.
Over the longer term, however, analysts caution that rising labor costs across the regional sector will feed into airlines’ unit cost calculations, particularly on thinner routes where margins are already slim. Carriers have typically responded either by trimming marginal frequencies, upgauging to larger aircraft where demand allows, or attempting to recover some of the cost through modest fare increases. The degree to which American and its competitors pursue those options will determine how visible the cost of PSA’s 50 percent pay boost becomes for passengers.
There is also a competitive dimension. Airlines that fail to match the new compensation standards risk operating with thinner staffing buffers, potentially leading to more operational meltdowns during peak travel periods. That, in turn, can influence traveler loyalty and corporate travel policies, especially among frequent flyers in smaller markets who may be more sensitive to disruptions than to small differences in price.
For now, consumer advocates note that the industry has room to absorb some of the higher labor costs, given the strong demand environment and the extent to which pandemic-era capacity reductions have tightened supply. The more immediate effect of the PSA deal is to reinforce a trajectory in which aviation jobs, especially at the entry and mid-career levels, are becoming more financially sustainable, potentially attracting a new generation into the profession.
What Comes Next for American and Its Regional Partners
The PSA agreement will face a ratification vote among the airline’s roughly 1,600 flight attendants in the weeks ahead, a process that will test whether the rank and file view the package as commensurate with the work they performed through the pandemic and the operational chaos that followed. Union leaders are already portraying the deal as a floor rather than a ceiling, emphasizing that its relatively short duration is designed to allow workers to renegotiate if travel demand and airline profitability remain strong.
For American Airlines and Robert Isom, attention is quickly pivoting back to the unresolved negotiations with mainline flight attendants, whose contract became amendable in 2019 and who have repeatedly signaled their readiness to escalate pressure. The contrast between the plaudits emanating from PSA’s union representatives and the discontent voiced by crews on American’s own metal will frame the next chapter of the company’s labor story.
The outcome of those talks will help determine whether the collaborative tone that emerged in PSA’s 50 percent pay deal can extend across the broader organization. If Isom is able to translate his regional success into a comprehensive settlement with mainline flight attendants, he could solidify a reputation as a leader who navigated one of the most turbulent periods in airline labor history while keeping the network largely intact. If not, American may find that its gains at PSA and other affiliates are overshadowed by unrest at the core of its operation.
Either way, the PSA agreement has already secured its place in the evolving narrative of U.S. aviation labor. By pairing unprecedented pay premiums with public union praise for a legacy airline CEO, it encapsulates the new bargaining reality taking shape above America’s runways, with implications that will extend far beyond the small regional jets that bear the PSA name.