JetBlue Latest and Greatest
03-12-2021, 07:52 AM
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03-12-2021, 08:26 AM
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Copy, I voted No, but in terms of the revenue sharing, my understanding is that relief was in order to allow participation in the Mutual Growth Incentive Agreement, where a portion of the revenue earned through the NEA went into a kind of escrow and was later given to JB and AA if they hit certain growth metrics. I can’t remember for sure, but I think it has to do with each airline increasing the number of flights to cities included in the NEA. That incentivized growth seemed like a good deal for the pilots to me.
Furthermore, I still don’t understand why this is needed or beneficial if that is in fact the basic structure of the MGIA. To break it down, say both we and AA grow, therefore a portion of that revenue from both of us goes into a pot, and then we pay ourselves from that pot? If we don’t grow, we don’t get money from that pot to which we contributed? Why even have a pot to begin with? In other words, what are the details of this MGIA...why is it more advantageous than simply generating and collecting revenue from us adding flights and growing? Same for AA? What good does this revenue sharing, in whatever form (MGIA or traditional), do for 1) JetBlue the company and 2) JetBlue pilots?
Which kind of brings me back to: what is it about this revenue sharing MGIA deal that should make me want to give 1.F.7 relief to allow it? How do we benefit from it more than if it didn’t exist? I guess we’d also need to know if the NEA can exist without the MGIA, from a regulatory standpoint and from each of the companies standpoint. Obviously there is a reason it exists. But I have yet to be convinced it’s beneficial in any way to the pilot group, nor have I been convinced its existence can’t be used against the pilot group somehow down the road. There is a reason there are prohibitions against it in the CBA.
Lastly, I’ve never heard of any revenue sharing JV in history that has been good for a pilot group, especially when there are no mechanisms in place for the pilot group to capture any of that additional revenue. The one thing delta pilots can point to with all their international JVs is their profit sharing checks. At least they capture some benefit of the JV...a decent consolation prize for losing/not having those WB seats. I know this is apples and oranges to the MGIA JV, but the principles apply. If it’s beneficial to JB, it should be beneficial to us. And if it is, how? If your answer is growth and pilot jobs, what specifically about the MGIA adds growth that the absence of the MGIA would prevent?
03-12-2021, 08:51 AM
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Posts: 537
I was a no voter but if you like the NEA as it’s been sold you need to have most of the relief LOA13 provides. If AA wants us to feed international flying out of NYC and Boston, we need to be able to put our code on AA international flights. Some destinations (Tel Aviv) won’t require relief to do that but as soon as we get an LR, everything in Western Europe and much of South America will. Without that, what’s the incentive for AA to partner? That 100% / 0% split is scary but my understanding is none of our planned Europe flying is included in the NEA and thus there’s nothing for AA to put their code on. How can it be anything but 100%?
I think the argument for the Caribbean limits and focus city to focus city flying is shakier from our perspective but it’s easy to see why increasing frequencies without costs would be appealing for both companies. Was the NEA possible without those provisions? I obviously can’t say. It seems we likely have more to gain but too much is based on trust.
When it comes down to it, I don’t think arguing LOA 12 vs LOA 13 is relevant. It’s growth with the NEA versus without it.
I think the argument for the Caribbean limits and focus city to focus city flying is shakier from our perspective but it’s easy to see why increasing frequencies without costs would be appealing for both companies. Was the NEA possible without those provisions? I obviously can’t say. It seems we likely have more to gain but too much is based on trust.
When it comes down to it, I don’t think arguing LOA 12 vs LOA 13 is relevant. It’s growth with the NEA versus without it.
First, regarding the NEA and the notion that it’s all or nothing and LOA13 is needed for it, I don’t care if they do it or don’t do it. If they want to make a deal that works within the confines of our CBA and LOA12 then great. If they don’t, then great. JetBlue would be just fine without AA. Second, what is in it for AA to partner? Well, Vasu is on record as saying they were barely ever profitable in NYC. Here’s what he said on a recent podcast:
It was all about Jetblue and Northeast and what it means for AA.
○ Even in best years, AA "barely made money" in the market. Had two choices, either exit market entirely, or accept ongoing losses. Partnership gives an innovative 3rd path
○ JetBlue allows AA to offer its customers the biggest network in both BOS and NYC powering growth across the broader AA network.
○ The relationship allows AA to contemplate new flying such as international markets like Athens, Chile and Tel Aviv from NYC
○ Allows AA to be a "growth" airline in both BOS and NYC markets which will help power AA's own future organic growth in these markets
○ AA vacating 50-seat RJ slots at LGA allows JetBlue to utilize slots better, which then frees up JetBlue slots at JFK for AA to play to its strength and add international flying
○ The more seamless AA can make partnerships, the better for all involved.
Why is this relevant? AA needs B6 a lot more than B6 needs AA. Prior to the Covid, AA was going to lease 20 JFK slots to B6. They have been shrinking in JFK for years, all while JetBlue grows. Also, JetBlue has been making a lot more money in New York and Boston than AA. So, without the partnership, and excluding covid, things were on a growth uptrend with JetBlue in NY, and a downtrend with AA in NY.
All that said, I think the NEA will be mutually beneficial for both airlines. It will provide a more robust combined alliance that better competes with DL/UA.
But there needs to be an agreement that fits within the CBA and LOA 12, or otherwise better codifies the benefits of the partnership to JetBlue pilots and better protects not only jobs, but growth. The growth metrics, the lookback period, etc. was a joke. The lack of profit sharing was a joke. The job protection was a joke. The 2% was a joke. And the possibility of one day discussing a flica waiting room is a joke.
I also disagree that arguing LOA 12 vs 13 is not relevant. It is most certainly relevant in the sense that LOA 12 is approved, and LOA 13 isn’t. LOA 12 allows a codeshare and partnership with AA. Also, nothing in the CBA or LOA12 prevents growth, organically or with a codeshare agreement with AA. So, I disagree with the notion that growth is only possible through LOA 13. Delta and United are both putting out big bids and it sounds like they will be hiring by the end of this year. Frontier and Spirit are hiring. And we are just going to sit around, even if the NEA falls apart for some reason and not keep growing, despite having a decent amount of planes on order?
And to the point I think you’re making that the NEA likely wouldn’t exist at all without the full extent of the relief provided by LOA 13, I don’t necessarily buy that either. IF the pilots and arbitrator hold the company’s feet to the fire, and we can’t strike a deal on an LOA 14 that allows all the relief necessary, Doug + Vasu and Robin + Scott will have to get creative on a solution. It may not be as juicy for them, but I would think an LOA 12 compliant NEA would be a lot better for AA than AA losing money trying to keep duking it out in the northeast against 3 big players instead of partnering with one against the other two.
03-12-2021, 02:29 PM
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Joined APC: Aug 2007
Posts: 1,019
While this may be true, and is what I have heard as well, have you seen the details in writing? I haven’t, despite repeated attempts to see it. I also haven’t been given any specifics in any discussions...just vague general explanations like yours without any sort of detail followed by “just trust us, it’s fine.” Ok...then why can’t I get or see any actual details on it?
Furthermore, I still don’t understand why this is needed or beneficial if that is in fact the basic structure of the MGIA. To break it down, say both we and AA grow, therefore a portion of that revenue from both of us goes into a pot, and then we pay ourselves from that pot? If we don’t grow, we don’t get money from that pot to which we contributed? Why even have a pot to begin with? In other words, what are the details of this MGIA...why is it more advantageous than simply generating and collecting revenue from us adding flights and growing? Same for AA? What good does this revenue sharing, in whatever form (MGIA or traditional), do for 1) JetBlue the company and 2) JetBlue pilots?
Which kind of brings me back to: what is it about this revenue sharing MGIA deal that should make me want to give 1.F.7 relief to allow it? How do we benefit from it more than if it didn’t exist? I guess we’d also need to know if the NEA can exist without the MGIA, from a regulatory standpoint and from each of the companies standpoint. Obviously there is a reason it exists. But I have yet to be convinced it’s beneficial in any way to the pilot group, nor have I been convinced its existence can’t be used against the pilot group somehow down the road. There is a reason there are prohibitions against it in the CBA.
Lastly, I’ve never heard of any revenue sharing JV in history that has been good for a pilot group, especially when there are no mechanisms in place for the pilot group to capture any of that additional revenue. The one thing delta pilots can point to with all their international JVs is their profit sharing checks. At least they capture some benefit of the JV...a decent consolation prize for losing/not having those WB seats. I know this is apples and oranges to the MGIA JV, but the principles apply. If it’s beneficial to JB, it should be beneficial to us. And if it is, how? If your answer is growth and pilot jobs, what specifically about the MGIA adds growth that the absence of the MGIA would prevent?
Furthermore, I still don’t understand why this is needed or beneficial if that is in fact the basic structure of the MGIA. To break it down, say both we and AA grow, therefore a portion of that revenue from both of us goes into a pot, and then we pay ourselves from that pot? If we don’t grow, we don’t get money from that pot to which we contributed? Why even have a pot to begin with? In other words, what are the details of this MGIA...why is it more advantageous than simply generating and collecting revenue from us adding flights and growing? Same for AA? What good does this revenue sharing, in whatever form (MGIA or traditional), do for 1) JetBlue the company and 2) JetBlue pilots?
Which kind of brings me back to: what is it about this revenue sharing MGIA deal that should make me want to give 1.F.7 relief to allow it? How do we benefit from it more than if it didn’t exist? I guess we’d also need to know if the NEA can exist without the MGIA, from a regulatory standpoint and from each of the companies standpoint. Obviously there is a reason it exists. But I have yet to be convinced it’s beneficial in any way to the pilot group, nor have I been convinced its existence can’t be used against the pilot group somehow down the road. There is a reason there are prohibitions against it in the CBA.
Lastly, I’ve never heard of any revenue sharing JV in history that has been good for a pilot group, especially when there are no mechanisms in place for the pilot group to capture any of that additional revenue. The one thing delta pilots can point to with all their international JVs is their profit sharing checks. At least they capture some benefit of the JV...a decent consolation prize for losing/not having those WB seats. I know this is apples and oranges to the MGIA JV, but the principles apply. If it’s beneficial to JB, it should be beneficial to us. And if it is, how? If your answer is growth and pilot jobs, what specifically about the MGIA adds growth that the absence of the MGIA would prevent?
Also, the NEA specifically forbids the two airlines from forming a joint venture (10.7), which is where the government definition of a JV and our CBA definition diverge.
03-17-2021, 07:22 AM
Gets Weekends Off
Joined APC: Jul 2018
Posts: 706
“Flying larger regional jets equipped with a first-class cabin was one of the major selling points for AA’s new Northeast alliance with JetBlue.”
It was one of the selling points guys!
https://thepointsguy.com/news/americ...g-embraer-170/
It was one of the selling points guys!
https://thepointsguy.com/news/americ...g-embraer-170/
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