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Southwest Airlines (LUV) Inks Tentative Deal With Pilots
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Southwest Airlines (LUV - Free Report) received encouraging tidings on the labor front when it reached provisional agreement with its pilots’ union (Southwest Airlines Pilots Association or SWAPA). We remind investors that earlier this month, SWAPA had reached an Agreement in Principle or AIP with the Dallas-based carrier on a new contract, after three and a half years of negotiations for higher pay and better working conditions. The agreement was evaluated by the pilots’ union. AIP became a tentative deal following the approval of SWAPA’s board.
After that, the provisional deal will be voted upon by LUV’s 11,000-plus pilots. The deal will materialize only if the voting outcome is favorable and will run through December 2028.
The deal, on becoming effective, will make the pilots eligible for significant gains in compensation, with pay rate hikes over the next four years. The agreement also includes provisions pertaining to improvements to work rules and flying schedules, better disability coverage and increases to retirement benefits. The value of the deal is reportedly $12 billion.
Per Captain Casey Murray, SWAPA’s president, “Our membership has fought for almost four years to reach an agreement with Southwest Airlines. They now have the opportunity to evaluate this deal and cast their vote accordingly.” LUV’s pilots will be voting on the tentative agreement till Jan 22, 2024.
With U.S. airlines grappling with pilot shortage as air-travel demand bounced back strongly from the pandemic lows, we have witnessed quite a few deals with this labor group in the airline space this year.
In August, American Airlines' (AAL - Free Report) four-year pact with pilots was ratified. The approval has made AAL’s pilots eligible for an immediate pay raise in excess of 21% on average. Also, the deal included provisions aimed at improving pilots’ quality of life. In fact, improvements pertaining to the quality of life represent nearly 20% of the increased value of the new contract.
In March, Delta Air Lines’ (DAL - Free Report) pilots ratified a four-year deal, which made DAL’s 15,0000 pilots eligible for a 34% pay hike over the next four years.
Zacks Rank & Key Picks
LUV, AAL and DAL currently carry a Zacks Rank #3 (Hold) each. Investors interested in the Zacks Airline industry may consider some better-ranked stocks like Air Canada (ACDVF - Free Report) and SkyWest (SKYW - Free Report) .
An uptick in passenger traffic is aiding ACDVF. Recently, management announced plans to launch a year-round route between Montreal and Madrid.
The service will commence in May 2024, as part of its expanded international summer 2024 flying schedule to cater to the increased demand. The Zacks Consensus Estimate for Air Canada’s 2023 and 2024 earnings has witnessed an increase of 32.6% and 41.3%, respectively, in the past 60 days.
SkyWest currently carries a Zacks Rank #2 (Buy). SKYW's fleet modernization efforts are commendable. The company’s initiatives to reward shareholders also bode well.
The Zacks Consensus Estimate for SKYW’s 2023 earnings has risen 38.9% in the past 60 days. The Zacks Consensus Estimate for 2024 earnings has jumped 33.2% in the past 60 days.
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Southwest Airlines (LUV) Inks Tentative Deal With Pilots
Southwest Airlines (LUV - Free Report) received encouraging tidings on the labor front when it reached provisional agreement with its pilots’ union (Southwest Airlines Pilots Association or SWAPA). We remind investors that earlier this month, SWAPA had reached an Agreement in Principle or AIP with the Dallas-based carrier on a new contract, after three and a half years of negotiations for higher pay and better working conditions. The agreement was evaluated by the pilots’ union. AIP became a tentative deal following the approval of SWAPA’s board.
After that, the provisional deal will be voted upon by LUV’s 11,000-plus pilots. The deal will materialize only if the voting outcome is favorable and will run through December 2028.
The deal, on becoming effective, will make the pilots eligible for significant gains in compensation, with pay rate hikes over the next four years. The agreement also includes provisions pertaining to improvements to work rules and flying schedules, better disability coverage and increases to retirement benefits. The value of the deal is reportedly $12 billion.
Per Captain Casey Murray, SWAPA’s president, “Our membership has fought for almost four years to reach an agreement with Southwest Airlines. They now have the opportunity to evaluate this deal and cast their vote accordingly.” LUV’s pilots will be voting on the tentative agreement till Jan 22, 2024.
With U.S. airlines grappling with pilot shortage as air-travel demand bounced back strongly from the pandemic lows, we have witnessed quite a few deals with this labor group in the airline space this year.
In August, American Airlines' (AAL - Free Report) four-year pact with pilots was ratified. The approval has made AAL’s pilots eligible for an immediate pay raise in excess of 21% on average. Also, the deal included provisions aimed at improving pilots’ quality of life. In fact, improvements pertaining to the quality of life represent nearly 20% of the increased value of the new contract.
In March, Delta Air Lines’ (DAL - Free Report) pilots ratified a four-year deal, which made DAL’s 15,0000 pilots eligible for a 34% pay hike over the next four years.
Zacks Rank & Key Picks
LUV, AAL and DAL currently carry a Zacks Rank #3 (Hold) each. Investors interested in the Zacks Airline industry may consider some better-ranked stocks like Air Canada (ACDVF - Free Report) and SkyWest (SKYW - Free Report) .
Air Canada currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
An uptick in passenger traffic is aiding ACDVF. Recently, management announced plans to launch a year-round route between Montreal and Madrid.
The service will commence in May 2024, as part of its expanded international summer 2024 flying schedule to cater to the increased demand. The Zacks Consensus Estimate for Air Canada’s 2023 and 2024 earnings has witnessed an increase of 32.6% and 41.3%, respectively, in the past 60 days.
SkyWest currently carries a Zacks Rank #2 (Buy). SKYW's fleet modernization efforts are commendable. The company’s initiatives to reward shareholders also bode well.
The Zacks Consensus Estimate for SKYW’s 2023 earnings has risen 38.9% in the past 60 days. The Zacks Consensus Estimate for 2024 earnings has jumped 33.2% in the past 60 days.