JetBlue and Spirit Unions Split on Airlines’ Merger

Unions that represent workers at JetBlue Airways and Spirit Airlines are divided on the proposed merger of the two companies, with one union throwing its support behind the deal and another asking federal officials to block it.

In a letter on Thursday, the Transport Workers Union, which represents 6,800 JetBlue flight attendants, asked Attorney General Merrick B. Garland and Transportation Secretary Pete Buttigieg to prevent the merger. The union said it feared that JetBlue, which would acquire Spirit, had no intention of honoring worker contracts afterward, adding it was concerned that the deal would violate antitrust laws and undermine competition.

Two days earlier, the Association of Flight Attendants-C.W.A., which represents 5,600 flight attendants at Spirit, gave the deal its blessing. The union’s leaders approved a tentative agreement with Spirit that includes higher wages and quality-of-life improvements, while also backing the merger. The union’s rank-and-file members have yet to vote on that agreement.

The Justice Department is expected to decide soon whether to sue to prevent the merger. Spirit shareholders approved the deal in October, and the two airlines have complied with the department’s requests for additional information, most recently in December. As a result, Spirit’s chief executive, Ted Christie, told investor analysts and reporters in early February that he expected a decision on the suit “in the next 30 days or so.”

Under President Biden, the Justice Department has taken an aggressive approach to antitrust concerns, investigating the practices of large companies, suing to prevent big corporate mergers and even suing to prevent a partnership between JetBlue and American Airlines in Boston and New York.

The agency is expected to at least secure concessions from Spirit and JetBlue before the acquisition proceeds, if not sue to block it. JetBlue has offered to divest Spirit’s assets in some markets, including Boston, New York and Fort Lauderdale, Fla. Opponents of the merger have also called on the Transportation Department to block the transfer of operating certificates between the two airlines.

In its letter on Thursday, John Samuelsen, the international president of the Transport Workers Union, urged the Justice and Transportation Departments “to take the necessary steps to prevent these airlines from combining until the leadership of the proposed carrier demonstrates their willingness to operate in good faith with their workers and the passengers.”

Labor Organizing and Union Drives

The letter asserted that should the acquisition be carried out, JetBlue management “has the intent to not fully honor” union agreements in place with JetBlue and Spirit workers.

JetBlue and the union negotiated their current workplace contract more than a year ago, but the union said the airline had failed to adhere to the provisions, including new rules on scheduling flight attendants. JetBlue did not immediately respond to a request for comment.

The Association of Flight Attendants-C.W.A., for its part, said it would support the merger after securing improvements and protections from management, include raises now and over the next two years, scheduling improvements for flight attendants and a promise from JetBlue to protect the seniority that workers at Spirit have earned.

In expectation that the merger will proceed, JetBlue has started making payments to Spirit’s shareholders, as agreed to under the deal. That includes $272 million paid in the last three months of 2022, with another $130 million in monthly payments planned for this year. If regulators thwart the deal, JetBlue has agreed to pay Spirit $70 million and Spirit’s shareholders $400 million.

JetBlue’s chief executive, Robin Hayes, told investor analysts and reporters on a call last month that even if a suit was filed, his airline expected to close the transaction early next year, provided that an attempt to block the merger failed.

In the past, it has taken 12 to 18 months to integrate airlines after a merger closes. To hasten that process, Mr. Hayes said, JetBlue has started to plot out the decisions that it would need to make.

“There’s a lot of wood to chop, but I couldn’t be more pleased with the start that we’ve made,” he said. “The partnership between the JetBlue and Spirit teams has just been excellent.”

The Transport Workers Union, some progressive lawmakers and consumer groups have expressed concern that the merger would further concentrate power in a heavily consolidated industry. They also worry that the elimination of Spirit would remove a competitive force that had acted to lower fares in the markets where it flew, harming consumers and workers.

After the sale, JetBlue would gain a majority market share on more than a dozen routes where neither it nor Spirit previously dominated, according to a New York Times analysis of a year’s worth of flight schedules from Cirium, an aviation data provider. Most of those routes start or end in Florida, where each airline has a strong presence.

JetBlue and Spirit have argued the opposite, that the merger would help increase competition. Combined, the airlines would have about 10 percent of the U.S. airline market, still well behind the 15 percent share of United Airlines, the fourth-largest carrier. The next-largest airline, Alaska Airlines, has 6 percent.

The acquisition would help JetBlue quickly expand its network, a goal it has held since at least 2016, when it lost a bidding war for Virgin America to Alaska. If the Spirit acquisition goes through, JetBlue will retain its name, its New York headquarters and Mr. Hayes in command. Spirit’s planes would be converted to match JetBlue’s in appearance and seat configuration, adding legroom.

Even if regulators allow the deal, combining airlines can be difficult, requiring integration of computer systems, aircraft fleets, company cultures and unions with different workplace rules.

Do you work in aviation? The Times wants to hear your story. Please share your experiences with us below, and you can learn more about our reporting here. We especially want to hear from people who work for (or used to work for) airports or airlines, or who are part of government agencies that help keep the aviation sector running. We won’t publish any part of your submission without your permission.

Source: Read Full Article