The Boeing Company (NYSE:BA) shares are trading higher today following a tentative deal with workers to avert a strike.

The company reached a tentative agreement with a union that represents over 32,000 workers in the U.S. Pacific Northwest. This agreement could prevent a potential strike that was set to begin as early as Sep. 13.

The proposed four-year contract, which includes a 25% wage increase and a commitment to build the next commercial airplane in the Seattle area, marks a significant win for new Boeing CEO Kelly Ortberg.

B Of A Securities analyst Ronald J. Epstein writes that in their previous discussion with IAM 751 President Jon Holden, the union’s key priorities were outlined as – Wages, Job Security, and Safety and Quality Oversight.

The union initially proposed a 40% wage increase over three to four years, reduced out-of-pocket healthcare costs, restoration of the defined-benefit pension plan, easing of mandatory overtime rules, and a commitment that Boeing’s next aircraft will be built in the Puget Sound region, adds the analyst.

Epstein says that while concessions and Holden’s endorsement suggest a lower chance of a strike, strong member support for the pension and wage increase poses a risk of rejection.

If accepted, the deal would benefit the industry by preventing further OEM delivery disruptions, adds the analyst.

Consequently, Epstein maintained a Neutral rating pending the vote outcome.

Apart from this, Boeing’s Starliner safely returned to Earth in New Mexico on Friday, concluding its three-month flight test.

The analyst sees both this successful landing and the union deal as meaningful positives for Boeing, improving sentiment and supporting Kelly Ortberg’s efforts to advance the company.

Investors can gain exposure to the stock via IShares U.S. Aerospace & Defense ETF (BATS:ITA) and Gabelli Commercial Aerospace and Defense ETF (NYSE:GCAD).

Price Action: BA shares are up 3.59% at $163.28 at the last check Monday.

Photo via Shutterstock

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