It was an excellent week for the World’s largest airliner by passenger traffic, American Airlines Group Inc (NASDAQ:AAL), as its pilots approved new wage contract for the next five years. The Allied Pilots Association conducted election for the new contract with over 66 percent pilots supporting the new wage structure.
American Airlines has hit a milestone with this approval after its integration with the US Airways in December 2013. The airliner employs over 15,000 pilots including 10,000 pilots from pre-merger American Airlines and 5,000 from the US Airways. The market pinned this result as a success for American Airlines Group Inc (NASDAQ:AAL). Michael Derchin, CRT Capital Group, said,
“Getting a ratified contract speeds up merger integration, (makes for) a more efficient operation … reduces uncertainty and de-risks the business.”
With this agreement with its pilots, American Airlines is now having proper working contracts with its primary employees including 15,000 pilots and 24,000 flight attendants. The airliner is still working over different contracts for its remaining 50,000 employees. The current contract with American Airlines Group Inc (NASDAQ:AAL) will offer its pilots pay increments of 23 percent for this year and three percent increase annually for the rest of the contract term.
Keith Wilson, president of the Allied Pilots Association, said,
“APA will now focus on further engagement with American Airlines management to address ongoing shortcomings in our contract.”
At the same time, Wilson said that the terms of employment offered in the contract are still trailing behind those offered by other airliners including Delta Air Lines, Inc. (NYSE:DAL).
One week prior to the voting, Wilson asked the pilot members to approve the current contract and said, “We have arguably come much further, much faster than either of those pilot groups.”
The shares of American Airlines Group Inc (NASDAQ:AAL) are trading at $49.08 with current P/E ratio of 12.48.
This article has been written by Prakash Pandey.
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