Per a Reuters report, leaders of United Airlines (UAL - Free Report) pilots’ union (Air Line Pilots Association) voted in favor of approving a tentative deal. Terms of the deal though are kept undisclosed. Notably, the Air Line Pilots Association represents roughly 13,000 pilots of this Chicago-based carrier.
By backing the deal, the union moved a inched closer to protecting jobs of nearly 2,850 pilots at United Airlines until June 2021. Following the support of union leaders, the provisional deal will be put to a full vote by union members from Sep 21.
We remind investors that earlier this month, United Airlines, which currently carries a Zacks Rank #3 (Hold), had warned that it will have to furlough about 16,370 employees including 2, 850 pilots starting next month.
Notably, airline companies, which accepted the financial assistance under the Coronavirus Aid, Relief and Economic Security (CARES) Act in April, are prohibited from laying off employees through Sep 30.Notably, Delta Air Lines (DAL - Free Report) is also hoping to avoid involuntary furloughs for its frontline employees, except for pilots, on Oct 1.
The entire scenario of job cuts can, however, be avoided if another round of federal help comes through. Many airline companies including American Airlines (AAL - Free Report) are lobbying for another $25-billion worth federal aid to protect jobs through March 2021. However, nothing has materialized yet
Zacks Rank & Key Pick
United Airlines carries a Zacks Rank #3 (Hold), currently. A better-ranked stock in the Zacks Transportation sector is Knight-Swift Transportation Holdings (KNX - Free Report) ,which presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings per share (three to five years) growth rate for Knight-Swift is expected at 15%.
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