Close on the heels of the tentative deal inked with the union representing its pilots, the Dallas-based Southwest Airlines Co. (LUV Quick QuoteLUV - Free Report) entered into an “agreement in principle” with its facilities maintenance technicians. Upon ratification, the five-year long deal will ensure higher pay and better working conditions for the low-cost carrier’s maintenance technicians.

The deal is however quite a distance away from materialization. Following the agreement-in-principle, the contract will now have to be reviewed by the National Executive Committee of the concerned union, that is, Aircraft Mechanics Fraternal Association (AMFA) – before the ratification voting procedure commences. The company will announce the date for the ratification process later. In the event of the deal with technicians materializing, it would mark the first deal for them since being accreted into AMFA.

Apart from the current agreement with technicians and the tentative deal with its pilots a few days ago, the carrier has inked other labor-related deals too of late. Earlier this year, Southwest reached a deal with its ground staff. We note that labor deals have been quite prevalent in the airline space of late. With the financial status of carriers greatly improved due to cheap oil, it is of little surprise that workers are demanding higher pay.

Zacks Rank & Key Picks

Southwest Airlines currently carries a Zacks Rank #5 (Strong Sell). Better-ranked stocks in the airline space include ANA Holdings Inc. (ALNPY Quick QuoteALNPY - Free Report) , Copa Holdings SA (CPA Quick QuoteCPA - Free Report) and SkyWest Inc. (SKYW Quick QuoteSKYW - Free Report) , all with a Zacks Rank #2 (Buy).

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