Southwest Airlines' Stock Gains As Airline Approaches Landmark Pilot Agreement Before Holiday Season

Southwest Airlines Company LUV shares are trading higher after the company is reportedly nearing a new contract agreement with its pilots' union. 

Shares of peers Delta Air Lines, Inc. DAL, United Airlines Holdings, Inc. UAL, and American Airlines Group, Inc. AAL are also trading higher Friday. 

Southwest Airlines is set to increase salaries for over 11,000 pilots and resolve lengthy, tense negotiations before the vital holiday travel period, according to a news report by CNBC.

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The parties have agreed on pay, retirement, and other terms, with ongoing discussions to finalize an implementation schedule, as the Southwest Airlines Pilots Association conveys to its members, which CNBC notes.

Delta Air Lines, United Airlines and American Airlines Group have already secured multibillion-dollar labor agreements with their pilots this year, the note read. 

These deals come as unions advocate for pay increases, improved scheduling, and other enhancements, following disruptions to contract discussions due to the COVID pandemic, it added.

Should the Southwest Pilots' union board approve the preliminary agreement in the upcoming weeks, it will then be presented to the pilots for a ratification vote, according to the CNBC report.

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Southwest and the union "are working hard to close out the few remaining items," an airline spokesman told CNBC. "Southwest remains committed to reaching an agreement that rewards our Pilots and places them competitively in the industry."

Earlier this fall, Southwest Airlines achieved a preliminary agreement with its flight attendants' union, offering a 36% pay raise for cabin crew members, the report read.

A labor agreement with its pilots would conclude a period of intense negotiations, which had recently escalated to the point of considering a potential strike, an extremely rare occurrence in the airline industry, CNBC added.

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Price Text: LUV shares are trading higher by 3.85% to $26.55 on the last check Friday. 

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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