United Continental Holdings Inc. (NYSE: UAL) the Chicago-based parent of United Airlines, has reached a tentative agreement on a new labor contract with the Air Line Pilots Association. The pilots union had threatened to go on strike. Pilots from United and Continental have been working without new contracts since they agreed to concessions during the airline industry’s recent financial woes.
In a statement released Friday, the company said the new joint collective bargaining agreement covers both the United and Continental subsidiaries. It is subject to conditions, including approval by the union’s master executive councils at each subsidiary and ratification by the pilots themselves. Some issues that do not involve compensation or rules governing what size aircraft are flown in the main jet fleet still must be settled, the union told its members.
“This agreement follows intense negotiations with our pilot group and is an important step forward for our company,” said Fred Abbott, senior vice president for United’s flight operations, in the statement.
United, like the airline industry as a whole, still faces slowing demand for both leisure and business travel due to the sluggish economy. The company was among those airlines whose stocks were downgraded this week on concerns by analysts that going forward the airlines will have difficulty filling their planes.
Shares of United Continental closed Thursday at $18.16 after falling more than 26% in the past month. The 52-week range is $15.51 to $25.84. Before this announcement, analysts had a mean price target of $30.23 on the shares.