United Continental‘s (NYSE:UAL) pilots are getting a very nice Christmas present this year.
The pilots union has agreed to a new contract that boosts pay by an average of 43.2% and distributes a $400 million lump sum payment amongst its members, the Associated Press notes.
Shares of United Continental climbed more than 3% in Monday morning trading.
Approved by 67% of the pilots who voted, the new contract covers both pilots who originally worked for Continental Airlines and those who flew for United Airlines. The two airlines merged in 2010, adopting the United name, but have experienced trouble combining operations.
The new contract expires at the end of 2016. In a statement, the union said the contract brings to an end worker concessions made during the airlines’ bankruptcies and the U.S. recession.
With the new contract, United can expand its use of regional jets that can hold 70 or more passengers. The larger jets are more profitable to operate. Under the contract, United can add 68 of those jets to its regional fleet in 2014, if it also adds larger jets with more than 100 seats.
United’s competes with Delta (NYSE:DAL), U.S. Airways (NYSE:LCC) and JetBlue (NASDAQ:JBLU).