The agreement, which runs through Aug. 31, 2020, includes future pay hikes as well as retrospective increases from 2013, Southwest Airlines Pilots' Association (SWAPA) said. (http://bit.ly/2c0ycrB)

"While a new contract is certainly not a done deal, this is the next step in the process," SWAPA President Jon Weaks said.

SWAPA's board will meet in mid-September to review the contract and decide if it should be put to a ratification vote, the union said.

(Reporting by Supantha Mukherjee in Bengaluru; Editing by Kirti Pandey)