(Adds context, analyst comment)
April 22 JetBlue Airways Corp pilots
voted by a wide margin on Tuesday to join the Air Line Pilots
Association union, sending the budget carrier's stock price down
on concerns the move would raise the airline's costs.
About 71 percent of the pilots eligible to vote in the
month-long election backed ALPA. JetBlue has about 2,600 pilots
and 96 percent were eligible to vote.
The vote marked the first successful union drive by a group
of workers at JetBlue.
It could lead to higher pay and benefits for workers, and is
likely to encourage efforts to organize other workers at JetBlue
and other budget airlines, which have enjoyed lower costs and
more labor flexibility than mainline carriers.
Jetblue "is going to have to look at themselves as more of a
traditional carrier," said Gary Chaisan, a labor professor at
Clark University in Worcester, Mass. "There will be attempts to
organize the rest of the workers."
Shares of JetBlue closed down 1.9 percent to $8.59. The
stock fell as low as $8.45 after the vote was announced.
JetBlue said it and ALPA would form negotiating committees
once the National Mediation Board, which conducted the election,
authorizes the union.
JetBlue, founded in 1998, had twice before faced a
unionization effort by pilots, but the workers failed to muster
The vote comes amid concern that the airline industry faces
a shortage of pilots due in part to new federal rules requiring
longer pilot rest periods and more hours of flying experience.
It also comes after workers recently rejected an attempt to
organize a Volkswagen AG plant in Tennessee, and the
United Auto Workers union on Monday withdrew a legal challenge
over the vote.
JetBlue warned earlier this year costs would rise largely
because of an agreement reached with pilots to raise base pay
rates by 20 percent. JetBlue said that increase was expected to
add $145 million to its costs over the next few years - $30
million this year, $50 million in 2015 and $65 million in 2016.
JetBlue also said plans to hire more pilots this year in
wake of the new U.S. rest rules would pressure its costs in
While union representation opens the door to further gains
by the pilots, including higher health care and pension costs,
experts said the workers won't want to damage the company and
may work with the airline to compromise. ALPA contracts also
vary from airline to airline, suggesting any new agreement would
not necessarily match those at bigger airlines.
"I don't think ALPA went to all this trouble to put JetBlue
out of business," said George Hamlin, an aviation consultant in
"They will try to get improved terms but I doubt that
they're promising to get legacy terms."
(Reporting by Alwyn Scott in New York and Karen Jacobs in
Atlanta; Editing by Matthew Lewis, Paul Simao and Meredith