Big Regional Jets: Still A No For Delta (DAL) Pilots?

According to a report published on Reuters, the pilots of Atlanta, GA-based airline behemoth Delta Air Lines, Inc. (NYSE:DAL) are unlikely to alter the present rules and fly planes exceeding a certain weight on regional routes. We note that the union Air Line Pilots Association – representing its 13,000 pilots – had inked an “agreement in Principle” with Delta in September this year.

The pilots are currently voting on the contract, with the verdict expected on Dec 1. According to the report, the final version of the deal is expected to contain a “scope clause.” The clause apparently prohibits planes with more than 76 seats and weighing in excess of 86,000 pounds from being flown on regional routes. In the event of the clause being ultimately present in the deal, manufacturers like Embraer SA (NYSE:ERJ) and Mitsubishi Heavy Industries Ltd. could suffer. This is because their latest regional jets weigh more than 86,000 pounds.

Apparently, the clause is designed to favor well-paid pilots of airline heavyweights since the usage of large planes on regional routes could adversely impact their earnings apart from creating bad working conditions. Though acceptance of the deal could be unfavorable for the likes of Embraer, it would undoubtedly be financially rewarding for Delta’s pilots. They are likely to have their pays hiked by 30.2% over four years, according to an Associated Press report.

DELTA AIR LINES Price

DELTA AIR LINES Price | DELTA AIR LINES Quote

We note that other airline heavyweights like United Continental (NYSE:UAL) and American Airlines Group (NASDAQ:AAL) have also entered into pay-related deals with their pilots this year.

Zacks Rank

Delta Air Lines currently carries a Zacks Rank # 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks’ Best Private Investment Ideas

In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?

Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>