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Spirit Airlines (SAVE) Pilots May Get Substantial Pay Hike
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Pilots of the ultra-low-cost carrier Spirit Airlines (SAVE - Free Report) have been offered upto 43% pay hike by the company following negotiations. The pay hike highlights the bargaining power enjoyed by unions in the U.S. airline sector. Per a Reuters report, this labor-friendly update is available in a memo sent by the Air Line Pilots Association (ALPA) — the union that represents SAVE’s pilots.
According to ALPA’s communication, the deal between the union and the company would result in a 43% cumulative weighted average pay hike for first officer and a 25% raise for captain over two years. Overall, it would lead to a 34% cumulative weighted average pay hike for pilots of the Miramar, FL-based carrier.
The contract, on materialization, will translate into an economic gain of $463 million or 27% over the next two years for SAVE’s pilots. Now the contract, which includes training pay among other benefits, will undergo the voting procedure of pilots covered by ALPA. The date for the procedure is yet to be fixed.
ALPA has road shows planned between Dec 14 and Dec 20 to garner support for the contract. The agreement will take effect from Jan 1, 2023 and run through two years on successful ratification.
With U.S. airlines grappling with pilot-shortage, the bargaining power of this group has naturally increased as air-travel demand is buoyant, having bounced back very strongly from the pandemic lows. Recently, Delta Air Lines’ (DAL - Free Report) management offered a 34% cumulative pay increase to its pilots over a three-year period.
The nearly 15,000 pilots at DAL are also represented by ALPA. Had the pay-hike agreement not been inked, DAL might have faced a strike. In October, 99% of the pilots voted in favor of a strike. Now if DAL and SAVE’s pay-hike-related agreements materialize, we could see many more similar deals in this short-staffed industry.
Key Picks
Some better-ranked stocks in the broader Transportation sector include the following:
Covenant Logistics (CVLG - Free Report) : CVLG offers a portfolio of transportation and logistics services, including asset-based expedited, dedicated and irregular route truckload capacity, besides asset-light warehousing, transportation management and freight brokerage capability.
The gradually improving freight market scenario is a tailwind to Covenant. CVLG’s cost-control efforts are appreciated as well. CVLG currently sports a Zacks Rank #1. The stock has witnessed the Zacks Consensus Estimate for 2022 earnings being revised 10.1% upward over the past 60 days.
Teekay Tankers (TNK - Free Report) : TNK is being well-served by the increase in tanker rates. A gradual ramp-up in economic activities also bodes well. High fuel costs are, however, weighing on the bottom line.
Teekay Tankers currently sports a Zacks Rank #1. TNK’s shares have soared 160% in a year’s time. Over the past 60 days, the Zacks Consensus Estimate for 2022 earnings has moved 87.6% north.
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Spirit Airlines (SAVE) Pilots May Get Substantial Pay Hike
Pilots of the ultra-low-cost carrier Spirit Airlines (SAVE - Free Report) have been offered upto 43% pay hike by the company following negotiations. The pay hike highlights the bargaining power enjoyed by unions in the U.S. airline sector. Per a Reuters report, this labor-friendly update is available in a memo sent by the Air Line Pilots Association (ALPA) — the union that represents SAVE’s pilots.
Spirit currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
According to ALPA’s communication, the deal between the union and the company would result in a 43% cumulative weighted average pay hike for first officer and a 25% raise for captain over two years. Overall, it would lead to a 34% cumulative weighted average pay hike for pilots of the Miramar, FL-based carrier.
The contract, on materialization, will translate into an economic gain of $463 million or 27% over the next two years for SAVE’s pilots. Now the contract, which includes training pay among other benefits, will undergo the voting procedure of pilots covered by ALPA. The date for the procedure is yet to be fixed.
ALPA has road shows planned between Dec 14 and Dec 20 to garner support for the contract. The agreement will take effect from Jan 1, 2023 and run through two years on successful ratification.
With U.S. airlines grappling with pilot-shortage, the bargaining power of this group has naturally increased as air-travel demand is buoyant, having bounced back very strongly from the pandemic lows. Recently, Delta Air Lines’ (DAL - Free Report) management offered a 34% cumulative pay increase to its pilots over a three-year period.
The nearly 15,000 pilots at DAL are also represented by ALPA. Had the pay-hike agreement not been inked, DAL might have faced a strike. In October, 99% of the pilots voted in favor of a strike. Now if DAL and SAVE’s pay-hike-related agreements materialize, we could see many more similar deals in this short-staffed industry.
Key Picks
Some better-ranked stocks in the broader Transportation sector include the following:
Covenant Logistics (CVLG - Free Report) : CVLG offers a portfolio of transportation and logistics services, including asset-based expedited, dedicated and irregular route truckload capacity, besides asset-light warehousing, transportation management and freight brokerage capability.
The gradually improving freight market scenario is a tailwind to Covenant. CVLG’s cost-control efforts are appreciated as well. CVLG currently sports a Zacks Rank #1. The stock has witnessed the Zacks Consensus Estimate for 2022 earnings being revised 10.1% upward over the past 60 days.
Teekay Tankers (TNK - Free Report) : TNK is being well-served by the increase in tanker rates. A gradual ramp-up in economic activities also bodes well. High fuel costs are, however, weighing on the bottom line.
Teekay Tankers currently sports a Zacks Rank #1. TNK’s shares have soared 160% in a year’s time. Over the past 60 days, the Zacks Consensus Estimate for 2022 earnings has moved 87.6% north.