United Airlines UAL suffered a setback on the labor front when its technicians rejected a contract offer to outsource work to China. An overwhelming 99.5% of the technicians, represented by teamsters, deemed the proposal disgraceful.

They believed that these were attempts by UAL to cut their wages and send work to China. Expressing their disapproval, Teamsters’ general president Sean M. O'Brien and Airline Division’s director Chris Griswold stated, "United Airlines' executives think they can strong-arm 10,000 Teamsters technicians into accepting a terrible deal. Instead, our members just sent a clear message that this company can't ignore. United's radical, un-American contract proposal is dead on arrival”.

The rejection came shortly after United Airlines' technicians rallied nationwide, demanding improved wages and more comprehensive health care coverage. The workers picketed last year as well to get their demands approved.

UAL Stock’s Price Performance

United Airlines' shares have lost 20.7% over the past three months, underperforming the Zacks Transportation - Airline industry’s 6.4% growth. The decline was due to the concerns of a slowdown in air travel demand (particularly for leisure) following tariff-related concerns. The overwhelming rejection of the contract offer, terming it as disgraceful, is a further setback for UAL.

Image Source: Zacks Investment Research

UAL’s Zacks Rank

UAL currently carries a Zacks Rank #3 (Hold).

Airline Stocks to Consider

Investors interested in the airline industry may consider SkyWest SKYW and Frontier Group ULCC.

SkyWest currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SKYW has an expected earnings growth rate of 16% for the current year. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 16.7%. Shares of SKYW have risen 9.5% over the past six months.

Frontier Group sports a Zacks Rank of 1 at present. ULCC has an expected earnings growth rate of more than 300% for the current year.

The company has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once. The average surprise is 1.1%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

United Airlines Holdings Inc (UAL) : Free Stock Analysis Report

SkyWest, Inc. (SKYW) : Free Stock Analysis Report

Frontier Group Holdings, Inc. (ULCC) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research