Labor trouble has emerged as a major pain point for the Airline industry of late. Amid this problem, European carrier Ryanair Holdings RYAAY received some encouraging tidings when it reached a pay-related agreement with the British Airline Pilots’ Association (BALPA).
The deal will accelerate pay restoration of pilots at RYAAY, currently carrying a Zacks Rank #5 (Strong Sell), and ensure pay hikes post restoration through 2026. The restoration of pay is necessary as RYAAY intends to expand capacity as much as 115% of the pre-coronavirus levels in the current year itself to meet the demand swell.
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Per Ryanair’s people director Darrell Hughes “While 100% of our pilots across our European network are covered by 2020 Emergency Agreements, we continue to work with our pilots and their unions on new deals, similar to this one concluded with BALPA, and have successfully re-negotiated improved long-term agreements with 70% of our pilots, running until 2026 or 2027 as we prioritize pay restoration.” Naturally, for this capacity expansion, it is imperative to keep RYAAY’s group of pilots satisfied. The pay increments apart, pilots at RYAAY also become eligible for other benefits.
That air-travel demand is northbound can be gauged from Ryanair’s traffic report for June, where it operated more than 8,500 flights. RYAAY attracted 15.9 million passengers in the month, up 203% year over year. Load factor (% of seats filled with passengers) touched 95% in June from 72% a year ago.
Stocks to Consider
Some better-ranked stocks in the broader Zacks Transportation sector are Kirby KEX and C.H. Robinson Worldwide CHRW.
Kirby has an expected earnings growth rate of 278.6% for the current year. KEX delivered a trailing four-quarter earnings surprise of 7.7%, on average.
Kirby has a long-term earnings growth rate of 12%. Shares of KEX have gained 2.3% so far this year. Gradual recovery in economic conditions is benefiting Kirby.
C.H. Robinson has an expected earnings growth rate of 15.9% for the current year. CHRW delivered a trailing four-quarter earnings surprise of 17.1%, on average.
C.H. Robinson has a long-term earnings growth rate of 9%. Shares of CHRW have gained 8.8% over the past year. Uptick in freight conditions in the United States aids C.H. Robinson.
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Ryanair Holdings PLC (RYAAY) : Free Stock Analysis Report
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