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American Airlines Nears Pay-Hike Deal with Service Staff

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There have been quite a few updates on labor deals (albeit tentative) in the airline space, of late. Soon after Southwest Airlines Inc. LUV and Republic Airways Holdings Inc. RJET inked provisional deals with their respective pilot unions pertaining to pilots' pay and work rules among other things, American Airlines GroupAAL recently announced a tentative pay-related agreement with the union representing its reservations and gate agents.

The tentative deal between the Fort Worth, TX-based carrier and the Communications Workers of America and International Brotherhood of Teamsters (CWA-IBT) is deemed a key positive toward the successful integration of the workforce of American Airlines and US Airways. The CWA-IBT represents the gate and ticket agents, Premium Service representatives, Reservations representatives and Travel Center representatives of the carrier and boasts more than 14,000 workers. We note that the workers were not unionized previously and came under the CWA-IBT umbrella only last year.

Following the tentative agreement on a new joint collective bargaining agreement, the above workers will vote on the same after a thorough review. The contract, if accepted, will ensure significant pay hikes, apart from job security and improved work rules, for the passenger service agents at American Airlines.

We note that American Airlines already has contract deals with its pilots and flight attendants. We won't be surprised if the outcome of the ratification voting procedure is positive in this case too. With American Airlines Group enjoying solid financial health, courtesy low oil prices , employees are naturally looking for higher pay and benefits.

Zacks Rank

American Airlines currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the airline space is Delta Air Lines DAL , sporting a Zacks Rank #1 (Strong Buy).

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SOUTHWEST AIR (LUV): Free Stock Analysis Report

REPUBLIC AIRWAY (RJET): Free Stock Analysis Report

DELTA AIR LINES (DAL): Free Stock Analysis Report

AMER AIRLINES (AAL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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