According to a union statement, Spirit Airlines (NYSE:SAVE) has given its pilots a cumulative weighted average pay boost of up to 43% over the course of two years.
The agreement will specifically lead to a cumulative weighted average pay boost of 43% for first-line officers and a compensation increase of 25% for captains over two years. As a result, Spirit pilots’ pay would go up by 34% on average, based on their weights. The suggested new contract would also increase training compensation and retirement benefits.
The new contract agreement, according to the Air Line Pilots Association, will provide the pilots with a $463 million, or 27%, increase in income over the following two years. The two-year deal would take effect on January 1 if approved by the pilots. To build support for the agreement, the pilot union has scheduled roadshows for this week.
Delta Air Lines and its pilot union reached an initial deal earlier in the month. There are ongoing conversations with other airlines. In the wake of increased caution among investors ahead of the Federal Reserve meeting next week, airline stocks dropped once more on Wednesday.
Interest rates are set to rise by 50 basis points, which is less than the previous four rate increases but is expected to heighten concerns about a 2023 recession. Investors in airlines are worried that the demand for leisure travel may decline and that it may take longer than expected for business and international travel to rebound.
Save Stock Outlook
Has the market overreacted to the recession? Morgan Stanley said earlier this week that 2023, with the right mix of market conditions, might be a “Goldilocks” year for the American airline industry. According to the company, the last three years have seen extreme weather: in 2020 and 2021, it was too cold due to the pandemic’s lasting effects, and in 2022, it was too hot due to pent-up demand and inflation. According to Morgan Stanley, there have been cost issues with capacity limitations, general inflation, and the price of jet fuel. MS’s bullish thesis says that the earnings environment in 2023 will be better than what the market expects.
Save Stock Declines Despite A Surprising Profit
Featured Image: Unsplash @ Forsaken Films
Author Jowi Kwasu 
