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Southwest (LUV) Faces Lawsuit From Pilots Over Work Conditions

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Southwest Airlines’ (LUV - Free Report) pilots’ union has filed a lawsuit against the company, alleging change in pay and working conditions imposed by the airline as a result of the pandemic.

The lawsuit filed by the Southwest Airlines Pilots Association (“SWAPA”) in the federal court in Dallas, TX claims that the airline “significantly altered working conditions, rules, and pay rates for pilots” without any negotiation. Southwest, on the other, hand feels that measures taken by the company to tackle the coronavirus-induced challenges did not require negotiations.

Southwest's vice president of labor relations, Russell McCrady, said in a statement to Business Insider, "As always, Southwest remains committed to Pilots' health and welfare and to working with SWAPA, and our other union partners, as we continue navigating the challenges presented by the ongoing pandemic.”

As per reports, the pilots’ union is seeking an injunction so that the company goes back to the terms of their collective bargaining agreement.

The lawsuit builds on Southwest’s ongoing troubles with its workers. Per a CNBC report, the carrier’s pilots’ union had, last month, warned of pickets at airports during the winter holidays to protest over poor work schedule and lack of proper accommodation and food.

With Southwest already struggling with operational disruptions related to staffing, due to which the carrier will reduce flight schedules through the rest of the year, the latest issue with its workers only adds to its woes.

Zacks Rank & Key Picks

Southwest carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the airline space are Controladorav Vuela Compania de Aviacion, S.A.B. de C.V. (VLRS - Free Report) , SkyWest, Inc. (SKYW - Free Report) and Corporacion America Airports S.A. (CAAP - Free Report) . While Controladora Vuela and SkyWest sport a Zacks Rank #1 (Strong Buy), Corporacion America Airports carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

While shares of Controladora Vuela and Corporacion America Airports have rallied more than 100% in a year’s time, SkyWest shares have gained more than 35% over the same time frame.