In a significant turn of events, flight attendants for Alaska Airlines ($ALK) have decisively rejected a tentative labor agreement that was reached with the company earlier in June. This decisive action paves the way for renewed negotiations between the air carrier and the union representing its flight attendants. As part of the ratification process, it has been reported that approximately 68% of union members voted against the proposed agreement, leaving only 32% in favor.
According to the Association of Flight Attendants-CWA, the tentative agreement aimed to raise the average pay of Alaska Airlines flight attendants by an impressive 32%, in addition to introducing several other benefits and solutions aimed at improving the workers' conditions. A spokesperson for Alaska Airlines emphasized their commitment to reaching a mutually beneficial agreement that honors the vital role that flight attendants play within the company, stating, "We remain committed to reaching an agreement that reflects the critical role of our flight attendants and is good for Alaska's long-term success." The spokesperson also mentioned that the airline will carefully assess the details available before regrouping with the Association of Flight Attendants to discuss potential next steps. In the wake of the agreement's rejection, the union's master executive council is set to conduct a survey among the members of the negotiation committee to understand the concerns that led to the contract's dismissal.
Furthermore, they plan to draft revised proposals and will coordinate with the National Mediation Board to secure additional dates for negotiations. The union firmly stated, "This is our contract, and we will fight to address membership concerns as expeditiously as possible," underscoring their determination to advocate for their members. In a broader context, it's important to note that Alaska Airlines had narrowed its full-year earnings outlook, now projecting earnings between $3.50 and $4.50 per share, a downward adjustment from previous expectations of $3.25 to $5.25.
This revision was partially attributed to the pending labor agreement. Chief Financial Officer Shane Tackett communicated to Reuters that the tentative deal is expected to have a substantial impact on third-quarter profits by reducing earnings per share by $0.50. In a separate development disclosed to the Securities and Exchange Commission on Wednesday, Alaska Airlines announced its agreement with the Department of Justice to extend the review period for its proposed merger with Hawaiian Airlines' parent company, Hawaiian Holdings ($HA), until Friday.
This extension follows an earlier postponement that occurred on July 29, which had pushed the review period to Thursday. The acquisition deal, valued at approximately $1.9 billion and structured as an all-cash transaction—including its outstanding debts—was initially agreed upon in December. Such strategic moves illustrate Alaska Airlines' ongoing efforts to solidify its market position, though they are currently faced with the challenges of labor negotiations and regulatory review.
Stock Information: Price: 35.35, Change: +0.58, Percent Change: +1.67..