This week, JetBlue Airways pilots agreed on the first labour contract in the low-cost carrier’s history. The JetBlue pilots contract will increase rates of pay for pilots and improve conditions. It’s good news for pilots, passengers and investors. So let’s take a look at the specifics of the JetBlue pilots deal.
Keeping your pilots happy is just as important as doing the same for your passengers. We learned this month with Ryanair just what happens when you don’t. Ryanair lost 5% of their value in mid-July after pilot strikes were announced. And passengers have been voting with their feet and looking elsewhere for their after summer flights.
So anyone with a relationship with JetBlue will be happy to hear of the JetBlue labour deal. A huge majority, roughly 72%, of all the voters, approved the four-year agreement. It was also a big ticket issue with an almost 100% turnout. The agreement is the result of 3 years of constant negotiations and comes into force Aug 1st. This proves just how quickly you can take off once you have everyone onboard.
The finer details of the JetBlue pilots contract
The new labour deal raises pay rates for two sets of fliers. The Airbus A320 pilots will see a pay rise of 18.5% while the Embraer 190 pilots will get 6.8%. JetBlue’s pilots have also agreed more vacation time and much better disability benefits. Which in such a high-stress job, is incredibly important.
ALPA President Tim Canoll went on record saying, “It provides significant pay increases, improvements to retirement, and enhanced working conditions.” But what does JetBlue corporate think of the deal?
The New York-based airline will need to free up a significant portion of its budget to meet these new costs. By either raising revenue or cutting costs, it will mean more than $300 million a year more in salary alone. JetBlue had over 3,000 pilots at the end of last year and an 18% rise is considerable. Some are estimating it’ll mean $130 million in first-year costs alone.
Who’s the real winner?
While JetBlue has sold it to their investors as “offering market competitive pay rates,” it must be a hard figure for many to stomach. Shares gained less than 1% after the initial announcement and then plunged once the true cost of the measures was revealed.
While it’s clear JetBlue have chosen to priorities pilots, many other jobs have been cut. We’ve had reports that JetBlue is eliminating back-office jobs to streamline operations. Airport jobs, such as flight attendants, gate agents and baggage handlers, aren’t affected – for now.
Depending on your position on the matter, one thing is for sure – by looking after their pilots, JetBlue is avoiding strikes. Strike action has been the biggest travel headache for many travellers in Europe this year. And while Ryanair may try to shrug it off, the effects of this action will hurt them for years to come – especially in their US aspirations.
So well done JetBlue for making sure your most valuable asset is kept happy and in the cockpit.
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