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Here's Why American Airlines (AAL) Stock is Popping Today
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On Friday, shares of legacy airline American Airlines (AAL - Free Report) are popping, up almost 3% in late-afternoon trading after the company announced it has reached a deal with 30,000 ground employees that, according to unions, will increase pay by an average of 22%.
However, this has added $75 million to the company’s pre-tax costs in its third quarter, and $120 million in the fourth quarter.
Working with the TWU-IAM Association, the deal covers 12 organized worker’s groups in maintenance, fleet service, and other ground services. In a statement, negotiators said the deal has made American’s compensation comparable or even slightly ahead of positions at top rivals United Continental (UAL - Free Report) and Delta Airlines (DAL - Free Report) .
“Association members at American Airlines will receive the industry-best wages they deserve now,” said Association Chair and Vice Chair Sito Pantoja and Harry Lombardo, respectively. “The process of bargaining joint contracts after a mega airline merger like American and US Airways is complex and time consuming. Association members will not have to wait to share appropriately in the success of their airline while their Negotiating Committees bargain hard to complete the process."
The pay raises will go into effect immediately. Union negotiators are continuing to argue for a bargaining agreement for the association, as they represent roughly a third of American's total workforce.
In their own statement, American elaborated on the pay increases, saying maintenance and related workers will receive a raise of 15%-36%, fleet service employees will get 24%, tower planners will get 31%, and weight and balance planners will get 55%.
“We are pleased to reach this innovative and unprecedented agreement," American Chief Operating Officer Robert Isom. “Today’s interim agreement is unique, and thanks to the experienced leadership of Association Chair Sito Pantoja, Association Vice Chair Harry Lombardo, and two extremely motivated and capable negotiating committees, we have joined together to put the interests of our co-workers and Association members first. We will continue to work toward a single agreement that accommodates the unique needs of each of these diverse groups, and remain committed to reaching that single agreement as quickly as we can.”
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Here's Why American Airlines (AAL) Stock is Popping Today
On Friday, shares of legacy airline American Airlines (AAL - Free Report) are popping, up almost 3% in late-afternoon trading after the company announced it has reached a deal with 30,000 ground employees that, according to unions, will increase pay by an average of 22%.
However, this has added $75 million to the company’s pre-tax costs in its third quarter, and $120 million in the fourth quarter.
Working with the TWU-IAM Association, the deal covers 12 organized worker’s groups in maintenance, fleet service, and other ground services. In a statement, negotiators said the deal has made American’s compensation comparable or even slightly ahead of positions at top rivals United Continental (UAL - Free Report) and Delta Airlines (DAL - Free Report) .
“Association members at American Airlines will receive the industry-best wages they deserve now,” said Association Chair and Vice Chair Sito Pantoja and Harry Lombardo, respectively. “The process of bargaining joint contracts after a mega airline merger like American and US Airways is complex and time consuming. Association members will not have to wait to share appropriately in the success of their airline while their Negotiating Committees bargain hard to complete the process."
The pay raises will go into effect immediately. Union negotiators are continuing to argue for a bargaining agreement for the association, as they represent roughly a third of American's total workforce.
In their own statement, American elaborated on the pay increases, saying maintenance and related workers will receive a raise of 15%-36%, fleet service employees will get 24%, tower planners will get 31%, and weight and balance planners will get 55%.
“We are pleased to reach this innovative and unprecedented agreement," American Chief Operating Officer Robert Isom. “Today’s interim agreement is unique, and thanks to the experienced leadership of Association Chair Sito Pantoja, Association Vice Chair Harry Lombardo, and two extremely motivated and capable negotiating committees, we have joined together to put the interests of our co-workers and Association members first. We will continue to work toward a single agreement that accommodates the unique needs of each of these diverse groups, and remain committed to reaching that single agreement as quickly as we can.”
Interested in the other top stories of the week? Listen to Zacks Friday Finish Line to catch up on the week’s financial and investment news.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>