FedEx Corporation (NYSE:FDX) reported that its pilots have voted in support of a possible strike to assist their union in attaining a new contract for increased salaries. According to the Air Line Pilots Association, 99% of all pilots voted during the election, with 97% in favor of a strike if one becomes necessary.
The pilots’ union and Memphis-based FedEx have been in contract negotiations for over two years, commencing from May 2021 and entering the mediation phase in October 2022, to devise new terms as the previous agreement is still in effect. Union representatives expect the strike-approval vote to provide increased bargaining leverage in ongoing discussions.
Union leaders are emphasizing that their primary objective is to achieve a negotiated agreement and not engage in a strike. Chris Norman, the head of the union’s FedEx chapter, said, “The ball is in management’s court, and it’s time for the company to get serious at the bargaining table and invest in our pilots.”
However, the possibility of a strike appears doubtful because of the legal framework which makes it challenging, and negotiations are expected to continue. Regardless, investors will undoubtedly follow the outcome closely.
Pilots across the transportation sector have seen their bargaining power increase due to rising demand, with air travel experiencing a robust recovery from the pandemic lows.
Zacks Rank & Stocks to Consider
Currently, FedEx (NYSE:FDX) has a Zacks Rank #3 (Hold).
In the Zacks Transportation sector, preferred stock picks include Copa Holdings, S.A. (NYSE:CPA) and Allegiant Travel Company (NASDAQ:ALGT). Copa Holdings, which is ranked #1 (Strong Buy), has benefited from improving air travel demand and foresees a 85% load factor in the present year. Its earnings are anticipated to increase by 669% in the second quarter and 65% for the whole of 2023 over a year ago. Allegiant, which is currently ranked at #2 (Buy), is also profiting from the bolstered air travel demand, with a revenue increase of 8.5% YoY in 2022. For the second quarter and full-year 2023, earnings are projected to rise by 328% and 182%, respectively, in comparison to the same period last year.
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