This story has been corrected to say that the pilot letter was signed by leaders of the United pilots master executive committee. An earlier version indicated the letter was signed by United MEC Chairman Jay Heppner.
"On a daily basis, pilots continue to report problems with pay, training, scheduling, hotels and transportation, crew meals, pilot-pushing and numerous other issues," wrote leaders of the United chapter of the Air Line Pilots Association, in a letter sent to United's 12,000 pilots on Friday.
A copy of the letter was obtained by TheStreet. "Pilot pushing" refers to overriding pilot concerns regarding an aircraft's safety. United's pilots are particularly concerned that the carrier relies heavily on forcing pilot overtime in order to maintain schedule integrity.
Last week, United's master executive council, composed of 20 pilot leaders from 11 pilot bases, unanimously rejected a letter of agreement, proposed by the carrier, intended to maintain schedule integrity with provisions to provide additional pay when pilots exceed contractual duty limits, according to the MEC's letter.
That letter of agreement would have replaced a memorandum of understanding that was part of a contract signed in 2012. Contract talks open next year.
"Until such time as the company is willing to address their deficiencies in honoring our contract, the MEC will no longer entertain overtures from management to fix their operational problems," the MEC leaders wrote.
The letter underscores a continuing conflict. In a March 12 letter to pilots, United MEC Chairman Jay Heppner said that the airline had not addressed long-standing pilot safety concerns including pilot pushing. A pilot leader who asked not be named said Sunday, "The pilots prefer that the company maintain schedule integrity, rather than rely on pilots to place band aids on the schedule -- even if the pilots receive overtime pay."
United spokeswoman Megan McCarthy said Sunday, "We will continue to work with the union on issues that are important to our pilots."
United shares closed Friday at $67.75, up $2.78, or 4.3%, leading all airline shares. For the full year, United shares are up 1.29%, while American (AAL) - Get Report is down 2% and Delta (DAL) - Get Report is down 9%. The S&P 500 is flat.
In general, airline shares are trading in response to fuel prices. Secondarily, the big three global airlines are being hurt by the strong dollar. Of the three largest domestic carriers, JetBlue
(JBLU) - Get Report is up 22%, Alaska
(ALK) - Get Report is up 10% and Southwest
(LUV) - Get Report is up 5%.
Credit Suisse analyst Julie Yates has an outperform rating on United, as does Wolfe Research analyst Hunter Keay. Buckingham Research analyst Daniel McKenzie has a buy and a $106 target price, and S&P Capital IQ analyst Jim Corridore has a strong buy and a $92 target.
"United in 2015 is structurally a different story vs. 2014 given fleet and network restructuring that accelerate," McKenzie wrote in a recent report. "And similarly, United in 2016 will be a different airline" due to changes that are now underway, he said.
In a report written in late February, when United shares traded around $65, Corridore wrote: "While we think United will lag the industry in revenue growth and unit costs for the next few quarters, we expect it to start to close the gap this year. We also think the shares are trading at a large valuation discount versus peers."
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.