Originally Posted by
SoFloFlyer
This is what I’m getting at. Spirit is in trouble if they can’t retain pilots and the way to do is by increasing pay. I’m JB is in the know because they have numbers to crunch as well.
To another poster that mentioned a JCBA, I’m aware that will have to be negotiated. That is also a lengthy process. After the money is transferred and the keys to operation is given to, JB will be funding the operation. So increase in pilot pay can’t be $500/hr. There will be a cap of some sort.
This line of thinking isn’t wrong at all. I went through a merger before coming into the 121 world and my company froze raises to appeal to the buyer. Wanted to show the other company that labor costs are fixed/lower long term. It’s a numbers game.
I believe that either JB knows of the necessary raises that needs to happen and is okay with it or JB paid so much more which allows for wiggle room for salary increases. Probably the first one.
Lastly, F9’s management themselves told our group that the last pay increase happened because the merger didn’t go through. They had to abide by the agreement and certain legalities while in merger talks which included raising pay (I summarized that, of course)
Jetblue may have incentives for Spirit to keep labor cost as low as possible, but thats about all they can do. Their was nowhere in the agreement that I saw that allows JetBlue pull out of the transaction of paying Spirit shareholders $34/share if pilot pay gets too high. The deal is with shareholders, not the pilots, labor costs are not a factor in this equation. Just because some management person said something, doesn’t mean it’s true. They raised F9 pay once during the merger talks, so what you were told was not even true.
Maybe the merger you had experience with was with private companies. That would make more sense. But it doesn’t with publicly traded companies in this situation. Also, we’re not trying to look attractive to JetBlue, they approached us and already signed on the dotted line. Done deal.