Southwest Airlines shares rose Thursday after it said it had reached a tentative agreement with the union representing 18,000 of its employees who handle the carrier's baggage, supplies and cargo.
Southwest LUV shares,
It rose 0.7% in premarket trading as it confirmed a new agreement with the transportation workers union Local 555, which includes its agents who handle ramp duties, operations, supply and shipping.
The new contract proposal will now be put before union members to vote on and ratify it.
The agreement comes after transit workers rejected a previous agreement in a vote on September 20.
Some of the changes from the rejected contract include increasing wages at each step, and reducing the current 13-step pay schedule to an 11-step pay schedule, according to a post on the union's website.
The new contract will pay a total bonus of $140 million, up from $70 million.
For retirement, it boosts the employer contribution to 10% of an employee's eligible compensation, from 9.3%.
The contract includes base salaries of $19.45 per hour in 2024 for new employees of ramp and supply work and a maximum of $38 per hour. The wage is scheduled to increase by 3% annually over the next four years.
For new hires in operations and shipping, new hires will earn $19.80 per hour and up to $38.35, with 3% annual increases through 2028.
In January, flight attendants at Southwest Airlines allowed a potential strike. TWU Local 556 said at the time that 98% of participating union members had approved a potential strike, which was the first time that had happened. This contract remains unresolved.
Meanwhile, Southwest pilots in January ratified a contract offering a nearly 50% pay increase by 2028.
delta airlines d,
And American Airlines AAL,
It also signed new contracts with the pilots last year.
