JetBlue Airways Corporation JBLU has announced the ratification of its four-year agreement with the pilots represented by Air Line Pilots Association. With a total of 98% pilots voting, 74% cast votes supporting this agreement.
The terms of the contract include a pay commensurate with industry standards among other clauses and will be effective Aug 1, this year.
We remind investors that the company reached an agreement in principle with its pilots this May. The pilots claimed that despite the airline generating record profits, they lag in terms of employee remuneration, benefits and work environment. (Read more: JetBlue Inches Closer to Clinch a Fair Pilot Contract)
JetBlue Airways Corporation Price
JetBlue Airways Corporation Price | JetBlue Airways Corporation Quote
Notably, labor deals are very much in vogue in the airline space. This March, Spirit Airlines, Inc. SAVE ratified its five-year deal with pilots pertaining to wage increase. With airline companies inking frequent labor deals, such costs are on an upswing and are putting pressure on the bottom line.
In fact, high labor and fuel costs were the prime reasons behind the International Air Transport Association’s (IATA) lowered profitability forecast in 2018. In June, the research firm predicted global net profit of $33.8 billion for the airline industry, lower than $38.4 billion projected last December.
Zacks Rank & Key Picks
JetBlue has a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader Transportation sector are CSX Corporation CSX, and Canadian National Railway Company CNI. While CSX sports a Zacks Rank #1 (Strong Buy), Canadian National Railway carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of CSX and Canadian National Railway have rallied more than 42% and 12%, respectively, in a year.
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