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Southwest Airlines' (LUV) 5-Year Pact With Pilots is Approved
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Southwest Airlines (LUV - Free Report) received encouraging tidings on the labor front when the company’s pilots, represented by Southwest Airlines Pilots Association or SWAPA, approved a five-year deal pertaining to wage increase. Evidently, SWAPA represents 11,000 pilots of Southwest Airlines. In the entire exercise, 98.8% pilots participated with 92.73% casting their votes in favor of the deal.
The approval makes LUV’s pilots eligible for an immediate 29.15% pay raise and a hike of 4% each in 2025, 2026 and 2027. The agreement provides for a 3.25% gain in wages in 2028. This new contract will run through Dec 2028.
Following the approval, pilots at LUV will be eligible for industry-leading maternity and paternity leaves, company-provided disability coverage, better retirement benefits and other perks. The contract also includes provisions with respect to pilot scheduling.
Expressing delight on the development, SWAPA’s president, Captain Cassey Murray, said, “This has been a long time coming and it is only through the unity of our pilot group that we were able to achieve the gains in this contract. This new collective bargaining agreement or CBA will bring our pilots the security and protections that have been long needed.”
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. For example, in August 2023, American Airlines (AAL - Free Report) pilots, represented by Allied Pilots Association, approved a four-year deal pertaining to wage increases. The approval made AAL’s pilots eligible for an immediate pay raise in excess of 21% on average. Also, the deal includes provisions aimed at improving pilots’ quality of life.
In September 2023, United Airlines’ (UAL - Free Report) pilot union ratified a $10-billion contract to increase their pay up to 40.2% over the four-year duration of the contract. In March 2023, Delta Air Lines’ (DAL - Free Report) pilots ratified a four-year deal, which made DAL’s 15,0000 pilots eligible for a 34% pay hike over the next four years.
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Southwest Airlines' (LUV) 5-Year Pact With Pilots is Approved
Southwest Airlines (LUV - Free Report) received encouraging tidings on the labor front when the company’s pilots, represented by Southwest Airlines Pilots Association or SWAPA, approved a five-year deal pertaining to wage increase. Evidently, SWAPA represents 11,000 pilots of Southwest Airlines. In the entire exercise, 98.8% pilots participated with 92.73% casting their votes in favor of the deal.
The approval makes LUV’s pilots eligible for an immediate 29.15% pay raise and a hike of 4% each in 2025, 2026 and 2027. The agreement provides for a 3.25% gain in wages in 2028. This new contract will run through Dec 2028.
Following the approval, pilots at LUV will be eligible for industry-leading maternity and paternity leaves, company-provided disability coverage, better retirement benefits and other perks. The contract also includes provisions with respect to pilot scheduling.
Expressing delight on the development, SWAPA’s president, Captain Cassey Murray, said, “This has been a long time coming and it is only through the unity of our pilot group that we were able to achieve the gains in this contract. This new collective bargaining agreement or CBA will bring our pilots the security and protections that have been long needed.”
The approval at LUV, currently carrying a Zacks Rank #3 (Hold), has come after more than three and a half years of negotiations. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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. For example, in August 2023, American Airlines (AAL - Free Report) pilots, represented by Allied Pilots Association, approved a four-year deal pertaining to wage increases. The approval made AAL’s pilots eligible for an immediate pay raise in excess of 21% on average. Also, the deal includes provisions aimed at improving pilots’ quality of life.
In September 2023, United Airlines’ (UAL - Free Report) pilot union ratified a $10-billion contract to increase their pay up to 40.2% over the four-year duration of the contract. In March 2023, Delta Air Lines’ (DAL - Free Report) pilots ratified a four-year deal, which made DAL’s 15,0000 pilots eligible for a 34% pay hike over the next four years.