I thought the first rule of arbitration was to never accept arbitration. Does anybody know why they did?

What is your reference for this?

They lead the entire industry in Profit Margin. Not by a large amount but they do lead

Welp, I hope we never agree to arbitration.

It's in the contract Section 1 Scope/Recognition/Merger....

2. Collective Bargaining Agreements:
The respective pilot collective bargaining agreements shall be merged into one (1) agreement as the result of negotiations among the pilot groups and the / / Company and the other air carrier in the Transaction as applicable. If the parties have not reached a single pilot collective bargaining agreement under this paragraph, the parties shall negotiate until such time as they have either reached agreement on an amended collective bargaining agreement or, alternatively, are determined to have reached impasse by a mediator employed by the National Mediation Board. Should an impasse be declared, the parties will submit all issues open between them to a panel of three (3) neutral arbitrators selected from a list provided by the National Mediation Board. The interest arbitration hearing shall be completed within three (3) months of the date of submission to the panel of arbitrators, and the panel’s decision shall be issued no later than thirty (30) days after the close of the hearing.

Thanks, Shy Guy

Here are the 3rd quarter 2017 profit margins (highest to lowest):
Alaska: 20%
JetBlue: 17.1%
Delta: 16.6%
Southwest: 16.5%
Spirit: 16.4%
United: 10.4%
American: 9.2%

So I'll ask again- What are you guys referencing?

What do you mean? You just answered your question? ALASKA leads the industry?

We are referencing the same stats you are

My understanding is that AAG management demanded this language for them to agree to a transition and process agreement at all. I don't know if the AS and VX MEC's believed they'd be operated as alter egos of each other if they didn't accept it, but in hindsight, it looks like a poor calculation. AAG management played this process well. That being said, VX had no CBA and AS got another bite of the apple outside section 6, so it isn't right to compare this outcome to a normal bargaining cycle. More like a bonus round for AS and a windfall for VX.

Words from ruling:

"In awarding these increases, we are satisfied that Alaska pilots will be properly ranked just behind the four leading industry carriers. There is reason for such relative juxtaposition, but it is also true that Alaska is not properly considered fully comparable to American, Delta, United or Southwest. Those carriers, unlike Alaska, all have large networks, in some cases global, and substantially different operating models. They are between 3 to 5 times larger than Alaska and, due to their larger size and scale, they maintain strong networks with large numbers of corporate accounts and high revenue customers who demand frequency and breadth of service that can only be provided by carriers of that size and scale. By contrast, Alaska earns almost half its domestic revenue from just two cities, Seattle and San Francisco. For these reasons, it cannot be considered a global network.

A fifth place ranking also recognizes the fact that Alaska occupies a similar position in virtually every business metric-operating revenue, net income, number of departures, available seats, and number of destinations served.


It is true that Alaska earns record pretax margins relative to the industry average, but that metric alone does not suggest that pilot pay should be the equivalent of the industry leaders."