Alaska Airlines,the wholly-owned subsidiary of Alaska Air Group ALK, received encouraging tidings on the labor front when its flight attendants, represented by the Association of Flight Attendants (“AFA”), approved a three-year deal about wage increase, boarding pay and retroactive pay.  AFA represents 7,000 pilots of Alaska Airlines. In the entire exercise, more than 90% flight attendants participated, with 95% casting their votes in favor of the deal.

The ratification makes Alaska Air’s flight attendants eligible for immediate pay increases ranging from 18.6% to 28.3%, boarding pay, retroactive pay, greater flexibility and scheduling enhancements, in addition to other benefits. This new contract has taken effect from March 2, 2025.

The previous contract became amendable in December 2022. The approval at Alaska Air, currently carrying a Zacks Rank #3 (Hold), has come after intense negotiations. We note that contracts in the airline industry do not expire. The current contract remains in effect until a new agreement is ratified.

Expressing delight on the development, Jeffrey Peterson, president of AFA Alaska Master Executive Council, said, “This agreement marks a major milestone for Alaska Airlines Flight Attendants. It reflects their essential role in ensuring both safety and operational excellence.”

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ALK’s Impressive Price Performance

Driven by upbeat air travel demand, shares of Alaska Air Group have rallied 96.1% in a year’s time, handsomely outperforming the Zacks Transportation-Airline industry in the timeframe.

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With U.S. airlines grappling with labor shortage, the bargaining power of this group has naturally increased as air-travel demand is buoyant, having bounced back very strongly from the pandemic lows.

For example, in August 2023, American Airlines AAL pilots, represented by the Allied Pilots Association, approved a four-year deal pertaining to wage increases. The approval made AAL’s pilots eligible for an immediate pay raise in excess of 21% on average. Also, the deal includes provisions aimed at improving pilots’ quality of life. In September 2024, the flight attendants of AAL ratified a new five-year contract, increasing the value of their then existing agreement by $4.2 billion.

In September 2023, United Airlines’ UAL pilot union ratified a $10-billion contract to increase their pay up to 40.2% over the four-year duration of the contract. In March 2023, Delta Air Lines’ DAL pilots ratified a four-year deal. This made DAL’s pilots eligible for a 34% pay hike over the next four years.

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