Unions representing JetBlue Airways and Spirit Airlines employees are divided over the proposed merger of the 2 corporations, with one union supporting the deal and one other asking federal officials to dam it.
In a Thursday letter, the Transportation Workers Union, which represents JetBlue’s 6,800 stewards, asked Attorney General Merrick B. Garland and Transportation Secretary Pete Buttigieg to forestall the merger. The union said it was concerned that JetBlue, which can take over Spirit, had no intention of honoring employees’ contracts afterwards, adding that it feared the deal would breach antitrust laws and weaken competition.
Two days earlier, the Stewards Association-CWA, which represents Spirit’s 5,600 stewards, blessed the deal. Union leaders approved a tentative take care of Spirit that features higher wages and improved quality of life while supporting the merger. The union’s rank-and-file members have yet to vote on the deal.
The Department of Justice is anticipated to make a decision soon whether to sue to forestall the merger. Spirit shareholders approved the deal in October, and the 2 airlines complied with the department’s requests for extra information, most recently in December. As a result, Spirit chief executive Ted Christie told investor analysts and reporters in early February that he expected a choice on the lawsuit “inside roughly 30 days.”
Under President Biden, the Department of Justice has taken an aggressive approach to antitrust issues, investigating the practices of enormous corporations, posing to forestall major corporate mergers, and even suing to forestall partnerships between JetBlue and American Airlines in Boston and New York.
The agency is anticipated to at the least obtain concessions from Spirit and JetBlue before proceeding with the takeover, if it doesn’t sue to dam them. JetBlue has offered to divest Spirit’s assets in certain markets, including Boston, New York, and Fort Lauderdale, Florida. Opponents of the merger also called on the Department of Transportation to dam the transfer of operating certificates between the 2 airlines.
IN your letter on ThursdayJohn Samuelsen, international chairman of the Transport Workers Union, urged the Justice and Transport Departments “to take the obligatory steps to forestall these airlines from merging until management of the proposed carrier shows a willingness to act in good faith with its employees and passengers.”
Labor organizing and union drives
The letter stated that if the takeover goes ahead, JetBlue management “intends not to completely honor” union agreements made with JetBlue and Spirit employees.
JetBlue and the union negotiated their first employment contract greater than a 12 months ago, however the union said the airline had did not comply with regulations, including latest rules on flight attendant scheduling.
In a message to airline stewards on Thursday night, JetBlue CEO Robin Hayes said the corporate was working closely with the Transport Workers Union to allay concerns in regards to the deal and the merger.
He also said the airline plans to maintain all JetBlue and Spirit worker bases where employees typically start and end their shifts, and that the airline’s long-standing commitment to no leave “will proceed to guide our decisions.”
The Stewards Association-CWA, for its part, said it will support the merger after providing improvements and protections from management, including raises now and over the following two years, planning for stewards improvements and a promise from JetBlue to guard seniority earned by Spirit employees.
“We agree with skeptics that consolidation has given some airlines extraordinary power,” Sara Nelson, the union’s president, said in a letter sent Tuesday to top lawmakers in Washington. “However, this merger will help correct this imbalance. The JetBlue-Spirit merger adds competition to the airline industry that provides employees more power together with selection that advantages consumers.”
Expecting the merger to proceed, JetBlue began making payments to Spirit shareholders as stipulated within the agreement. This includes $272 million paid in the ultimate three months of 2022, with one other $130 million in monthly payments planned for this 12 months. If regulators thwart the deal, JetBlue agreed to pay Spirit $70 million and Spirit shareholders $400 million.
JetBlue’s Mr. Hayes told investor analysts and reporters in a phone call last month that even when the lawsuit is filed, his airline expects to shut the deal early next 12 months, provided an try and block the merger fails.
In the past, post-merger integration for airlines took 12 to 18 months. To speed up the method, Hayes said, JetBlue began planning the choices it will need to make.
“There’s numerous wood to cut, but I could not be happier with the beginning we made,” he said. “The collaboration between the JetBlue and Spirit teams was just perfect.”
The Transport Workers Union, some progressive lawmakers and consumer groups expressed concern that the merger would result in an extra concentration of power in a heavily consolidated industry. They also fear that eliminating Spirit will remove a competitive force that has worked to drive down prices within the markets it has flown to, hurting consumers and employees.
After the sale, JetBlue would gain a majority market share on a dozen routes where neither it nor Spirit previously dominated, in line with a New York Times evaluation of the annual schedules of air data provider Cirium. Most of those routes start or end in Florida, where every airline has a powerful presence.
JetBlue and Spirit argue on the contrary that a merger would help increase competition. Combined, the airlines would have about 10 percent of the U.S. aviation market, still far 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 rapidly expand its network, a goal it has held since at the least 2016 when it lost a bidding war over Virgin America with Alaska. If the Spirit acquisition goes through, JetBlue will retain its name, its New York headquarters and Mr. Hayes’ command. Spirit aircraft can be converted to match JetBlue’s look and seat configuration, adding legroom.
Even if regulators allow the deal, merging airlines may be difficult and require the combination of computer systems, aircraft fleets, company cultures and unions with different policies within the workplace.
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