Southwest Airlines-Flight Attendant Union Ink Tentative Deal

Southwest Airlines Co.LUV recently announced that it has reached a tentative agreement with Transport Workers Union Local 556, which represents its Flight Attendants.

The agreement is yet to be ratified by the Flight Attendants and the company has not disclosed dates or other details associated with the ratification vote. The deal, if ratified, will benefit the company and its operations.

Southwest has been focused on making consistent efforts to reach employee agreements for quite some time. Recently, the company reached an agreement in principle with Facilities Maintenance Technician, which is subject to review by Aircraft Mechanics Fraternal Association's ("AMFA") National Executive Committee before being voted upon. The company also announced a tentative agreement with its Pilots, whose current contract became amenable in Sep 2012. Furthermore, the company inked a deal with its ground staff earlier in 2016.

Last month, the company announced the retirement of its Senior Vice President of Labor Relations, Randy Babbitt, who joined the company in 2012. Notably, Babbit spent more than fifty years in the commercial aviation industry. The company had reached six contracts during his tenure.

August Traffic Results

Southwest Airlines recently posted an increase in traffic and capacity by 3.6% and 4.6%, respectively, for the month of August. However, the company's load factor deteriorated by 80 basis points to 84.6% as capacity expansion outpaced traffic growth.

Due to a technology outage issue in July this year, Southwest Airlines continues to expect a decline of 3.5% to 4.5% in operating revenue per Available Seat Mile (RASM) from the third quarter of 2015. Earlier, the company was anticipating a decline in RASM in the range of 3% to 4%.

Zacks Rank and Stocks to Consider

Southwest Airlines currently carries a Zacks Rank #5 (Strong Sell). A better-ranked stock in this industry with Zacks Rank #1 (Strong Buy) is Copa Holdings SA CPA . You can see the complete list of today's Zacks #1 Rank stocks here . Other well-ranked stocks in the airline space include ANA Holdings Inc. ALNPY and SkyWest Inc. SKYW . Both these stocks carry a Zacks Rank #2 (Buy).

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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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