Southwest Airlines Co. LUV received encouraging tidings on the labor front when the airline announced that its Flight Simulator Technicians, represented by the International Brotherhood of Teamsters Local 19, voted in favor of their new contract.
Following the ratification, the airline’s Flight Simulator Technicians will be eligible for higher pay. Apart from the introduction of a new Simulation Engineer classification, the ratified contract offers maternity and parental leave for eligible employees. This contract will be amendable in September 2028.
The airline employs more than 50 Flight Simulator Technicians who maintain and support the company’s flight training equipment. With this result, the airline has finalized all of its labor contracts. Since October 2022, each of the 12 union-represented workgroups, representing about 83% of Southwest Employees, has ratified new contracts.
As U.S. airlines grapple with the labor shortage, the bargaining power of various labor groups has risen due to a robust recovery in air travel demand following the pandemic's lows. This heightened bargaining power has led to numerous labor agreements in the airline industry recently.
LUV’s Stock Price Performance
LUV is currently encountering several headwinds, ranging from high costs to escalated debt. As a result, the stock has declined 1.6% over the past year compared to its industry’s 31.3% uptick.
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The ratification of the deal with Flight Simulator Technicians represents a positive development for the stock, reflecting its labor-friendly approach. Satisfied labor groups lead to greater operational efficiency.
LUV’s Zacks Rank
Southwest Airlines currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks for investors’ consideration in the Zacks Transportation sector include C.H. Robinson Worldwide CHRW and Westinghouse Air Brake Technologies WAB.
C.H. Robinson Worldwide currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. CHRW has an expected earnings growth rate of 25.2% for the current year.
The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 7.3%. Shares of CHRW have risen 14.2% in the past year.
WAB carries a Zacks Rank #2 (Buy) at present and has an expected earnings growth rate of 26% for the current year.
The company has a discouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters. The average beat is 11.8%. Shares of WAB have climbed 61% in the past year.
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C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
Westinghouse Air Brake Technologies Corporation (WAB) : Free Stock Analysis Report
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