This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Delta Union Battle Bores Investors

ATLANTA ( TheStreet) -- After some initial euphoria, Wall Street decided it doesn't really care whether Delta (DAL) flight attendants join a union.

On Wednesday, Delta shares surged around 2:15 p.m. as results of the election began to become known. Between 2:10 p.m. and 2:50 p.m., the shares rose 5% to $14.44. Then they fell back, closing at $14.14, up just 2% for the day.

Delta

Late Thursday morning, Delta shares were trading at $13.89, down 30 cents, even though most airline shares were up modestly.

Delta's union battles will likely continue. Hours after the results were announced, the Association of Flight Attendants charged that the carrier intimidated workers in violation of federal labor law and said it wants a re-run. The first step is to request an investigation by the National Mediation Board. Also, Delta's 16,500 fleet service agents will soon vote on whether to join International Association of Machinists.

In the meantime, as far as Delta's stock price, analysts are saying the flight attendant election results are a positive, but only in an ephemeral way. The results will not affect Delta costs and no one has changed Delta's target price.

"Although Delta's non-union flight attendants are more productive than Northwest's, they are also paid more and have no union dues," wrote Soleil Securities analyst Jim Higgins in a post-election report. "We are not convinced that unionization of the group would have led to higher costs for Delta, but nonetheless prefer yesterday's outcome from an investment standpoint."

CRT Capital Group analyst Mike Derchin called the election results "a big win for Delta and a positive for shareholders."

"We believe the market assumed that Delta was going to go union -- the odds were stacked against management," Derchin wrote in a report. He added that the election result "gives Delta more flexibility to run the airline and fosters greater productivity but wage rates were likely to go up in either case, so we do not see us making any adjustments to our earnings model."

Delta itself sees no impact on costs. "We don't believe the outcome of union elections would materially change our cost projections," said spokeswoman Gina Laughlin. "We've already accounted for the cost of harmonizing workgroups, which includes a projected increase to former Northwest frontline employee wages to meet generally higher Delta pay rates."

Both Higgins and Derchin have buys on Delta shares. Even before the election results were known, Higgins had a price target of $18 and Derchin had a target of $19. Those targets have not changed.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,156.85 +24.88 0.15%
S&P 500 2,001.57 +2.59 0.13%
NASDAQ 4,562.1890 +9.43 0.21%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs