7 years ago, jetBlue opened their doors. They hired non-union pilots at 30% less than A320 rates at their competitiors. They had no defined benefit contribution plan. Since they undercut Union contracts and had lower labor costs, they were able to sell cheaper seats and still make huge profits.
So? How is this a bad thing? Those pilots took a job that pays less than others. How is that such a bad thing?
Since they were the "hometown" airline in NYC, the LARGEST media and financial market in the free world, their success got LOTS of positive publicity. They were the media darlings.
So? They figured out a way to provide a service to the public at a lower cost than the competitors. Thats what companies do. How is this such a bad thing?
Now you've lost me. Taking a job that pays less than another job makes you a protoscab?
that originally went to work there got lots of stock options. The IPO went to $70 a share. Hopefully, the orginal protoscabs sold then, because after the intial split, the price has been in a downward spiral ever since. But, I digress.
What? It's wrong to get stock options?
Along came 9/11. Two of the major Unionized carriers used either the threat of bankruptcy or the actual bankruptcy court to exact concessions from their pilots. USAir guys saw their wages drop to jetBlue rates and their pension go Bye-Bye. UAL pilots were gutted by the bankruptcy court judge and had jetBlue rates imposed on them. Likewise, they saw their pension fly away.
It seems to me the real villain here is the "Unionized carriers that used the threat of bankruptcy to extract concessions from their pilots" How is it jetBlue's fault that USAir lowered their wages?
You seem to be under the impression that one company lowering their wages somehow magically opens a door for another company to lower their wages as well. There are some flight schools that pay instructors $25 an hour, and some that pay $10 an hour. If your assumption were right, every single flight school would be paying $10 an hour because other school "demonstrated" instructors will work for $10 an hour. The world doesn't work that way.
Why? Because the airline managers saw jetBlue's early success. That success was fueled by favorable lease rates and extremely favorable labor costs. Since they are non-Union, the Company can basicly impose any pay rate and work rule they want.
Thats how companies make money. By not having a unions constantly breathe down their backs.
Additionally, jetBlue came up with the ingenious wrinkle of the 5 year personal service contract. So, if you're identified as someone who is supporting unionization, you may not be offered a contract extension at the end of 5 years.
Because they know unionizing would mess up their profits. If the pilots were willing to work for them under the advertised compensation plan, then why need a union?
The other beauty of the jetBlue system (from a management standpoint) is that you can selectively reduce your labor costs as the group matures by replacing higher scale pilots with new hires and upgrade junior pilots who get paid less.
If the pilots who work for them are all right with this, then whats the problem? Are you afraid that if jetBlue does it, all the other union carriers will follow suit?
So where have industry pay rates gone since the advent of jetBlue? Narrowbody Captains at UAL and USAir make about $130. That's down from over $200. Delta MD Captains make $140. Also down from over $200. Alaska Captains make $155, down from $195. And it doesn't stop at the narrowbodies. Widebody Captains make $180, down from $250-$280.
And thats
all jetBlue's fault right? 9/11 had nothing to do with it, nor did the economy, right?...
So you tell me who is to blame? Management? They're just taking what they can. Aided by the bankruptcy court, the threat of bankruptcy and 9/11, they are just paying what the market rate is. And its demonstrated by the fact that jetBlue can get pilots to willingly undercut Union rates.
Market rate? How can one company paying low wages define what the market rate is?
