Shares of American Airlines Group Inc. (NASDAQ: AAL) increased 2.74% to $34.50 on Friday. Following the company’s announcement about it reached an interim agreement with a labor union to raise wages for about 30,000 of its ground staff, effective immediately. On Friday, the company said it expected the hike to increase its pretax operating costs by about $75 million in the third quarter and $120 million in the fourth quarter.
The contract is the first for the work group that covers employees from American and US Airways, which merged in 2013. The merger, and the creation of the new union, extended the time needed to negotiate a full agreement. The interim pact means workers don’t have to wait for raises while talks continue.
“With 12 diverse work groups represented by the association, reaching a single agreement for this specific set of co-workers is taking longer than any of us anticipated,” Robert Isom, American’s chief operating officer, said in a statement. “Today’s interim agreement is unique.”
The pay hikes range from 15 to 36 percent for maintenance and related employees, 24 percent for fleet service employees, 31 percent for tower planners and 55 percent for weight and balance planners. The increases now give employees in each of these groups the highest hourly wage rates amongst their peers at other network carriers, American Airlines said.