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Ray Neidl, Maxim Group, breaks down battles taking place over contracts between unions and major airlines, including American.
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Industry one on top of American airlines' problems with its pilots flight attendants for US air rejected a contract offer for the second time this here.
Joining me now to break it all down -- -- -- -- maxim group senior equity analyst.
Seems like when you say airlines labor problems sort of go hand in hand no matter what I mean this is an industry that can't get out from under -- Let's look American right now what what's the resolution there.
Well basically the -- to restart contract negotiations.
And hopefully.
The union the -- and we'll come to the talks.
Which I think they will.
Meaning to get a contract.
The rank and file seemed to.
Want to to the merger would US Airways -- I think the priority for everybody in that union is to get a contract first.
Yeah in you mentioned US air they're having problems of their and I mean they had there there are struggling with their flight attendants rate and what's the resolution there.
Well it's funny US Airways says.
Agreements -- the American airline unions but.
Are still some outstanding with their own unions including the polyps before -- attempts.
What -- -- -- the courts with airlines and especially if you're an airline investor or is this something to get concerned about.
No it's a risk you have as investor.
The industry is very heavily unionized.
And includes a very well -- fueled we will compensated.
And you -- have these potential liver problems.
And they can really come up the works without question I mean unlike I guess direct freeze get a good job you're watching -- did nothing but all of -- up the works by.
With the airlines I mean they can do subtle work stoppages even if they're not supposed do they can really cause Havoc.
It's -- service business out and you have to serve the public influence of the public.
Google elsewhere so it's very and for the employees are very important.
At the same time I'd flown a lot recently and never get on a plane that there's -- and DC and it seems like the airlines have done a really good job of squeezing out extra capacity what would you say about the overall health of the airline industry right now.
It strong.
We may be heading into recession.
I don't know will be the first big test for the industry.
They've lost money he has an industry in the -- the recession.
I think they have restructured themselves in the cost structure which may get through next recession is still generate profits who's the pick up a letter in the airline group and who would you avoid right now.
Well I would tend to go more with the when I called niche carriers that I really niche they're good -- carriers.
There and specialized areas of the country -- more flexibility lower cost.
And the management seems a bitter labor relations this is airlines like last year in the West Coast.
-- blues on these -- who wants to be -- airlines in the East Coast.
They've got a low cost product called Spirit Airlines.
And the key thing with all these carriers have one thing in common dual growing not shrinking and they're -- preferably.
-- -- that anywhere you had skipped a big names.
I would tend to say with some big names for the shorter term longer term though with the industry restructuring.
Delta's a power house united once they get their merger related problems that it was going to be a powerhouse and if American does their restructuring correctly there will be very strong as well.
Interest -- -- not -- thanks when are we appreciate it into.
And coming up tonight on money -- -- go one on one with economist Brian Wesbury after prints were -- -- -- --
