A contract extension approved by JetBlue pilots will give them a raise of more than 20% over the next 18 months. The development comes as the carrier is looking to merge with Spirit Airlines, and the industry is on a recovery course. As air travel bounces back, pilots in the US are increasingly gaining the power to negotiate better salary contracts for future security.

Contract extension approved

A majority of JetBlue pilots have given their seal of approval for a two-year contract extension that will see their compensation increase by 21.5% over the next year and a half. The deal comes into effect on February 1st, and according to The Air Line Pilots Association (ALPA), 75% of the carrier's pilots have approved the terms of the contract.

Chris Kenney, chair of JetBlue's ALPA unit, commented,

“This contract extension provides unprecedented pay increases for JetBlue pilots across the board and recognises the contributions of JetBlue pilots to the success of this airline, including the planned merger with Spirit Airlines. As JetBlue pursues this merger, this agreement protects the career expectations of JetBlue pilots while the market for pilots rises.”

Reuters reports that the deal accommodates a market rate adjustment provision, so that pay rates for pilots align with future contracts at big national carriers. It also says that JetBlue pilots are entitled to a one-time payment of up to $17,000.

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Bargaining power

JetBlue is in the process of acquiring Spirit Airlines. While the fate of the deal rests in regulatory approvals, if everything goes according to plan, it is expected to close in the first half of 2024.

Last year, Spirit Airlines' pilots sought recognition for their contributions to their company's bottom line, especially through the pandemic and recovery, and initiated talks of better pay and work rules ahead of the merger. The airline's pilots also managed to get a new two-year contract, offering as much as a 43% cumulative weighted average pay raise over the next 12 months.

As the industry recovers from the pandemic and passenger demand shoots up, US pilots find themselves in a better position to negotiate better compensation. Delta Air Lines' pilots, too, will vote on a proposed agreement that promises to offer them an 18% pay rise on the day the contract is signed as well as a 5% increase one year later, and then 4% increases in each of the subsequent two years.

Ending the year profitably

JetBlue pilots' contract revision comes soon after the airline announced that it ended 2022 with a great fourth quarter. The carrier reported a net income for the fourth quarter of 2022 of $24 million ($0.07 per share), up significantly from a loss of $129 million during the same period last year.

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It recorded a Q4 operating revenue of $2.4 billion, the highest last-quarter operating revenue in company history. This was partly due to an increase in capacity by 2.4% compared to the corresponding period in 2019.

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• 

  JetBlue

  IATA/ICAO Code:

  B6/JBA

  Hub(s):

  Boston Logan International Airport, Los Angeles International Airport, New York JFK Airport, Orlando International Airport

  Year Founded:

  2000

  CEO:

  Robin Hayes

  Country:

  United States