NEW YORK (TheStreet) -- JetBlue Airways is becoming the last major U.S. airline to
have unionized pilots, but the effects on the company's costs may not be as
drastic as feared.
After the stock dropped yesterday on news of the vote, it
was trading recently at $8.64, up 5 cents. The shares have risen over 20%
during the past year.
On Tuesday, JetBlue pilots voted to join the Air Line Pilots
Association union as 71% of pilots eligible to vote in the month-long election
backed joining the ALPA. The pilots' union drive had failed in two previous
attempts.
Lee Moak, ALPA's president, said in a statement that the
aviation landscape has changed drastically over the past few years, and in
order for JetBlue to have a say in the industry, its pilots had to unionize.
The move to unionize could lead to higher pay and benefits
for pilots. JetBlue has enjoyed low costs and labor flexibility as workers did
not have the organization in the past to demand changes, and the company has
been able to pass any cost savings onto customers.
Still, analysts say that workers won't want to damage the
company and may work with the airline on compromises. ALPA contracts vary for
different airlines, and so any new agreement may not match the salaries and
benefits at larger airlines.
JetBlue executives see the airline as one built for leisure
travel, and have said that they have no interest in joining the wave of
consolidation that has swept the U.S. airline industry.
David Neeleman, the airline's founder and former chief
executive, has argued, however, that JetBlue's higher costs are a disadvantage
and an indicator that the airline might not be able to operate independently
forever.
JetBlue said it and ALPA would form negotiating committees
once the National Mediation Board, which conducted the election, authorizes the
union.
Source: Philly.com
/ The Street
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