WestJet clears an obstacle hurdle

Article Excerpt

WESTJET AIRLINES $18.85 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 123.3 million; Market cap: $2.2 billion; Dividend yield: 3.0%) and its pilots together have approved a settlement process to reach a first contract. Any remaining issues will be resolved through binding arbitration. That averts a costly strike. A key part of the agreement is that pilots who fly for the company’s budget carrier Swoop will now be unionized. Swoop’s use of unionized pilots—most likely existing WestJet employees—could raise the company’s labour costs. However, demand for pilots worldwide remains very high. That’s more likely to drive pilot salaries and benefits rather than unionization. WestJet is still a buy. buy. …