It's a leverage issue. Yes it's a robust pattern bargaining environment but how much are we really going to get? Looking at it from their perspective, why should they pay a penny more than what they are proposing? Ultimately, the only threat that exists is the issue of retention and attraction of pilots. AAG didn't throw money at Horizon out of the goodness of their hearts, they threw money at them because they had issues of retention and attraction, and those numbers were off the charts! Those two issues led to massive cancellations, loss of revenue, and hurt customer service. The story at AS/VX is entirely different.

We can try and sell the idea of retention issues and how people can go to other airlines, but the reality is there won't be a mass exodus. Mgt directly called us out by laying out actual attrition numbers since the merger closed. Only 20 AS and 5 VX guys have left out of ~2700. That's 0.7% attrition in almost one year. Worse case maybe the number jumps to 1-2% tops. You can't get younger and the average age of pilots at the combined company is easily in the 40s. It's not easy to start over, and most people have too much skin vested into this combined company to start over in a seniority-driven industry. So the retention issue isn't an issue - it'll be a non-event. The 2020 decade may be a different story once the 800-900+ retirements per legacy hits, but we're not there yet. This contract is a 2017-2020 contract and by then it'll be a new cycle of negotiations.

The next aspect is attraction for pilots to want to come work here. Even if we get the worst case Alaska pay proposal, there are still enough pilots who like the PNW, Alaska, or the west coast in general that they will come here. Just like they are coming to Spirit right now at $38.50/hr even though their quick upgrades are gone and their growth won't make them CAs for 7-8 years. As far as AS goes, it still doesn't change the fact that pilots from all over the place (regionals, corporate, military) will come to a LCC or a semi-legacy. Some will make a career here, some will try and use it as a springboard to a real legacy airline. Alaska will throw money at us when there is a problem. From the AAG standpoint, AS/VX do not have a problem. Horizon does, but not us.