Alaska Air (ALK) Arm's Pact With Technicians Gets Approval
Alaska Airlines, the wholly-owned subsidiary of Alaska Air Group ALK, received encouraging tidings on the labor front when its aircraft maintenance technicians, maintenance controllers and supporting staff, represented by the Aircraft Mechanics Fraternal Association or AMFA, approved a new five-year contract.
Negotiated over 12 months, the deal boasts increased pay, enhanced retirement contributions and quality of life improvements. CEO Ben Minicucci commended the airline’s expertise and dedication, emphasizing the swift ratification just four months after the previous contract's amendable date. This marks the seventh ratified contract across six represented groups since 2022, underscoring Alaska Air’s commitment to its workforce.
AMFA's national president, Bret Oestreich, lauded the agreement for its fair compensation and job security provisions, crediting the negotiating committee for securing crucial protections. The contract, effective since Oct 17, 2023, includes wage hikes, schedule enhancements, retirement benefits and language amendments to bolster productivity. With this landmark deal, Alaska Airlines aims to attract and retain top talent, cementing its position for sustained success in the aviation industry.
We note that contracts in the airline industry do not expire. Once they become amendable, the current contract remains effective until a new agreement is ratified.With the U.S. airlines grappling with labor shortages, the bargaining power of labor groups has naturally increased as air travel demand is buoyant, having bounced back strongly from the pandemic lows. Therefore, we have seen quite a few labor pacts being inked in the airline space of late.
In August 2023, American Airlines AAL pilots, represented by the 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 pilot union ratified a $10-billion contract to increase their pay up to 40.2% over the four-year duration of the contract.
Zacks Rank
Alaska Air currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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