United Airlines - the wholly owned subsidiary of
United Continental Holdings Inc.
) - has signed a tentative agreement with International
Association of Mechanists (IAM) for several of its work groups.
The pact was signed nearly six months after the unionized ground
workers of the largest U.S. passenger carrier rejected a joint
labor contract covering workers from both United and Continental
airlines. Notably, United and Continental had merged in 2010.
The workers group will include gate and reservation workers,
baggage handlers and shopkeepers of United, Continental and two
of its subsidiaries Continental Micronesia and Mileage plus. This
work group will become the second group within United Airlines to
have a joint contract covering workers of both the carriers.
United Airlines is still negotiating with its flight attendants
over a joint contract.
The tentative deal enhances the hourly wages, job security,
pension benefits and healthcare expenses of around 28,000 of its
ground workers. The agreement includes a maximum pay rate hike of
$24/hour for most of the workers along with the provision for
additional rise in the future. As per the details provide by the
unions, full-time and part-time employees will receive a signing
bonus of $105 and $52.50 respectively.
National Mediation Board that supervises labor relations in
the airline and railroad industry, assisted United Airlines
through the negotiations. The deal which runs through till Jan 1,
2017 still requires the sanction from IAM members, who are
expected to give their nod by Nov 1, 2013.
United Airline is currently spreading its network in both
domestic and international markets. Within the domestic market,
the company has added non-stop flights from Chicago to Elmira,
State College and Topeka. The Chicago based company also added a
non-stop route between Chicago and Edinburg. The new routes are
expected to be operational during 2014.
We believe that bringing the IAM group under one contract will
allow United Airlines to improve operational efficiency by freely
scheduling employees within their specific functions and
arranging a single set of rules for each work group.
United operates with the likes of
Delta Airlines Inc.
) and carries a Zacks Rank #4 (Sell). However, sector stocks of
Republic Airways Holdings Inc.
Hawaiian Holdings Inc.
) look attractive with a Zacks Rank #2 (Buy).
DELTA AIR LINES (DAL): Free Stock Analysis
HAWAIIAN HLDGS (HA): Free Stock Analysis
REPUBLIC AIRWAY (RJET): Free Stock Analysis
UNITED CONT HLD (UAL): Free Stock Analysis
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