Federal Judge Slaps Down JetBlue-Spirit Merger, Citing Competition Concerns

Federal Judge Slaps Down JetBlue-Spirit Merger, Citing Competition Concerns

Federal Judge Slaps Down JetBlue-Spirit Merger, Citing Competition Concerns

Federal Judge Slaps Down JetBlue-Spirit Merger, Citing Competition Concerns

IAM141.org

U.S. District Judge William Young blocked the $3.8 billion attempt by Jetblue to purchase Spirit Airlines, citing monopolistic concerns. The decision is a victory for the Biden Administration, who had opposed the acquisition.

 

DALLAS — U.S. District Judge William Young ruled against JetBlue Airways’ proposed $3.8 billion acquisition of Spirit Airlines. The ruling, citing competition concerns, aligns with the Biden administration’s opposition to the merger. The ruling was handed down on Monday. 

In March, the Justice Department filed a lawsuit to block the merger, arguing it would increase fares by eliminating Spirit. The DOJ also found airfares were likely to rise if Spirit, a low-cost airline, was removed as an option for air travelers. JetBlue is considering an appeal of today’s ruling. The airline stated the deal is necessary to better compete with larger U.S. airlines.

The Transport Workers Union International President John Samuelsen issued a statement on Tuesday in which he said the decision would end a “period of uncertainty,” at both airlines.

“Both work groups gain in the end,” said Samuelsen. “We won hard-fought economic and work-rule improvements for our JetBlue Inflight Crewmembers while protecting our Guest Service Agents’ contract at Spirit.”

The Transport Workers Union represents 7,000 JetBlue Inflight Crewmembers. On top of regularly scheduled contractual raises, TWU recently wrested from the bosses at JetBlue an additional 17% in pay raises. The TWU also represents Spirit Guest Service Agents at Fort Lauderdale International Airport.

“Robust airline competition makes it more affordable to fly,” The DOJ said in a release dated March 7, 2203. “Travelers depend on low-cost flight options to see the world, go home for the holidays, visit their family and friends, show up to help in an emergency, or travel at the last minute. The Justice Department found that the proposed merger violates the Clayton Act by eliminating the largest, most aggressive ultra-low-cost competitor, grounding Spirit’s most cost-conscious customers, and substantially reducing competition on a significant number of concentrated, overlapping routes that carry millions of passengers.”

“We continue to believe that our combination is the best opportunity to increase competition and choice by bringing low fares and great service to more customers in more markets,” JetBlue said in a response to the decision.

The ruling is a victory for the Biden administration, which has challenged consolidation in various industries, claiming it harms consumers and adds to rising prices. The Justice Department said the JetBlue-Spirit merger would particularly affect travelers dependent on Spirit’s fares.

Judge Young, overseeing the trial last year, stated in his decision that the merger “would substantially lessen competition” in violation of antitrust law.

Following the decision, shares of Spirit Airlines Inc. dropped, while JetBlue shares rose by 8%.

For JetBlue, this is the second major setback in federal court in the space of a year, following the termination of a partnership with American Airlines. Joanna Geraghty will soon replace Robin Hayes, who oversaw both blocked deals in his tenure as CEO.

The decision may allow Frontier Airlines to attempt to buy Spirit again. The two airlines initially announced a deal in 2022, but JetBlue’s higher offer secured the bid for Spirit.

Judge Young’s decision read, in part, “The Court rules that the proposed acquisition violates Section 7 of the Clayton Act. Spirit is a small airline. But there are those who love it. To those dedicated customers of Spirit, this one’s for you. Why? Because the Clayton Act, a 109-year-old statute requires this result –- a statute that continues to deliver for the American people.”

“Summing it up, if JetBlue were permitted to gobble up Spirit -– at least as proposed — it would eliminate one of the airline industry’s few primary competitors that provides unique innovation and price discipline. It would further consolidate an oligopoly by immediately doubling JetBlue’s stakeholder size in the industry. Worse yet, the merger would likely incentivize JetBlue further to abandon its roots as a maverick, low-cost carrier.”

The ruling concluded a 17-day trial featuring Young’s testimony from 22 witnesses, hundreds of exhibits, and extensive evidence submissions. 

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Stay up to date with all the latest news and information from the District 141 of the Machinists Union

Federal Judge Slaps Down JetBlue-Spirit Merger, Citing Competition Concerns

16 January 2024

U.S. District Judge William Young blocked the $3.8 billion attempt by Jetblue to purchase Spirit Airlines, citing monopolistic concerns. The decision is a victory for the Biden Administration, who had opposed the acquisition.

 

DALLAS — U.S. District Judge William Young ruled against JetBlue Airways’ proposed $3.8 billion acquisition of Spirit Airlines. The ruling, citing competition concerns, aligns with the Biden administration’s opposition to the merger. The ruling was handed down on Monday. 

In March, the Justice Department filed a lawsuit to block the merger, arguing it would increase fares by eliminating Spirit. The DOJ also found airfares were likely to rise if Spirit, a low-cost airline, was removed as an option for air travelers. JetBlue is considering an appeal of today’s ruling. The airline stated the deal is necessary to better compete with larger U.S. airlines.

The Transport Workers Union International President John Samuelsen issued a statement on Tuesday in which he said the decision would end a “period of uncertainty,” at both airlines.

“Both work groups gain in the end,” said Samuelsen. “We won hard-fought economic and work-rule improvements for our JetBlue Inflight Crewmembers while protecting our Guest Service Agents’ contract at Spirit.”

The Transport Workers Union represents 7,000 JetBlue Inflight Crewmembers. On top of regularly scheduled contractual raises, TWU recently wrested from the bosses at JetBlue an additional 17% in pay raises. The TWU also represents Spirit Guest Service Agents at Fort Lauderdale International Airport.

“Robust airline competition makes it more affordable to fly,” The DOJ said in a release dated March 7, 2203. “Travelers depend on low-cost flight options to see the world, go home for the holidays, visit their family and friends, show up to help in an emergency, or travel at the last minute. The Justice Department found that the proposed merger violates the Clayton Act by eliminating the largest, most aggressive ultra-low-cost competitor, grounding Spirit’s most cost-conscious customers, and substantially reducing competition on a significant number of concentrated, overlapping routes that carry millions of passengers.”

“We continue to believe that our combination is the best opportunity to increase competition and choice by bringing low fares and great service to more customers in more markets,” JetBlue said in a response to the decision.

The ruling is a victory for the Biden administration, which has challenged consolidation in various industries, claiming it harms consumers and adds to rising prices. The Justice Department said the JetBlue-Spirit merger would particularly affect travelers dependent on Spirit’s fares.

Judge Young, overseeing the trial last year, stated in his decision that the merger “would substantially lessen competition” in violation of antitrust law.

Following the decision, shares of Spirit Airlines Inc. dropped, while JetBlue shares rose by 8%.

For JetBlue, this is the second major setback in federal court in the space of a year, following the termination of a partnership with American Airlines. Joanna Geraghty will soon replace Robin Hayes, who oversaw both blocked deals in his tenure as CEO.

The decision may allow Frontier Airlines to attempt to buy Spirit again. The two airlines initially announced a deal in 2022, but JetBlue’s higher offer secured the bid for Spirit.

Judge Young’s decision read, in part, “The Court rules that the proposed acquisition violates Section 7 of the Clayton Act. Spirit is a small airline. But there are those who love it. To those dedicated customers of Spirit, this one’s for you. Why? Because the Clayton Act, a 109-year-old statute requires this result –- a statute that continues to deliver for the American people.”

“Summing it up, if JetBlue were permitted to gobble up Spirit -– at least as proposed — it would eliminate one of the airline industry’s few primary competitors that provides unique innovation and price discipline. It would further consolidate an oligopoly by immediately doubling JetBlue’s stakeholder size in the industry. Worse yet, the merger would likely incentivize JetBlue further to abandon its roots as a maverick, low-cost carrier.”

The ruling concluded a 17-day trial featuring Young’s testimony from 22 witnesses, hundreds of exhibits, and extensive evidence submissions. 

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Dennis Spencer Named New Safety Director for American, Spirit

Dennis Spencer Named New Safety Director for American, Spirit

Dennis Spencer Named Safety Director for American, Spirit Members

Safety
18 October 2022

Dennis Spencer, Safety Chairman from Local Lodge 1776, has been appointed to Safety Director for District 141, overseeing safety programs for Union Members at American Airlines and Spirit.

The promotion was announced at the District Convention in September and became official on October 1. Dennis will be taking the helm following the retirement of Tony D’Aloiso, who held the position for years.

Dennis Spencer is a well-respected safety professional who has worked in the airline industry for over 30 years. Hired initially as a  Catering Agent at US Air in 1989, Dennis worked his way up to Station Trainer, navigating through a merger with American Airlines along the way. 

In 2008, Spencer decided to enter the world of Union Activism and immediately made an impact; he became a Union Steward, Headed up the Safety Committee as Chairman, and served as a Local Trustee – all in the space of a single year.

“I am very competitive in everything I do,” Spencer said of his rapid rise in the union. But, he stressed that his goal has always been clearly trained on the purpose of safety. “Our members have a very physically demanding job,” he said. “There’s a lot of involved in what they do. I feel a deep sense of responsibility to do everything I possibly can to keep our members safe on the job.”

Dennis will coordinate and lead safety initiatives for American Airlines members across the country in his new role. Among his many responsibilities, he will help ensure the safety and health of all fleet service members for American Airlines and fleet service members of Spirit Airlines in (FLL). His jobs will include serving as the primary member of the GSAP ERC Board, making him responsible for all GSAPs filed by Machinists Union Members.

He will also continue to administer the UnionSafe141.org website, which was the subject of special praise at the District 141 Committee Conference, held earlier this year. “I have no doubt that this website has saved lives,” said District Media Director Eric Price at the time. “The site that Spencer’s running allows anyone to report, track and record safety concerns – on the scene, right from their cellphones,” he said. “The work that Spencer’s doing is truly, truly groundbreaking,” he continued, pointing out that the safety tracking done by Spencer at American has won many court cases and prompted sweeping, nationwide changes in how American Airlines operates. 

District 141 President Mike Klemm released a statement saying, “Dennis Spencer is a proven leader with a wealth of experience in aviation safety. I am confident he will do an outstanding job in his new role as Safety Director at the District. I can’t wait to see what his imagination and energy are able to accomplish at the national level.”

“I am honored to be given this opportunity to lead the safety program for District 141, and I will do everything in my power to protect our members,” Spencer said of his assignment. He thanked his family for their patience over the years, as his work often requires long hours and extended time in the field. “And Tony D’Alosio. He was very instrumental in my development professionally and personally, preparing me for the role.”

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Dennis Spencer Named Safet Director for American, Spirit Airlines

18 October, 2022

Dennis Spencer, Safety Chairman from Local Lodge 1776, has been appointed to Safety Director for District 141, overseeing safety programs for Union Members at American Airlines and Spirit.

 The promotion was announced at the District Convention in September and became official on October 1. Dennis will be taking the helm following the retirement of Tony D’Aloiso, who held the position for years.

Dennis Spencer is a well-respected safety professional who has worked in the airline industry for over 30 years. Hired initially as a  Catering Agent at US Air in 1989, Dennis worked his way up to Station Trainer, navigating through a merger with American Airlines along the way. 

In 2008, Spencer decided to enter the world of Union Activism and immediately made an impact; he became a Union Steward, Headed up the Safety Committee as Chairman, and served as a Local Trustee – all in the space of a single year.

“I am very competitive in everything I do,” Spencer said of his rapid rise in the union. But, he stressed that his goal has always been clearly trained on the purpose of safety. “Our members have a very physically demanding job,” he said. “There’s a lot of involved in what they do. I feel a deep sense of responsibility to do everything I possibly can to keep our members safe on the job.”

Dennis will coordinate and lead safety initiatives for American Airlines members across the country in his new role. Among his many responsibilities, he will help ensure the safety and health of all fleet service members for American Airlines and fleet service members of Spirit Airlines in (FLL). His jobs will include serving as the primary member of the GSAP ERC Board, making him responsible for all GSAPs filed by Machinists Union Members.

He will also continue to administer the UnionSafe141.org website, which was the subject of special praise at the District 141 Committee Conference, held earlier this year. “I have no doubt that this website has saved lives,” said District Media Director Eric Price at the time. “The site that Spencer’s running allows anyone to report, track and record safety concerns – on the scene, right from their cellphones,” he said. “The work that Spencer’s doing is truly, truly groundbreaking,” he continued, pointing out that the safety tracking done by Spencer at American has won many court cases and prompted sweeping, nationwide changes in how American Airlines operates. 

District 141 President Mike Klemm released a statement saying, “Dennis Spencer is a proven leader with a wealth of experience in aviation safety. I am confident he will do an outstanding job in his new role as Safety Director at the District. I can’t wait to see what his imagination and energy are able to accomplish at the national level.”

“I am honored to be given this opportunity to lead the safety program for District 141, and I will do everything in my power to protect our members,” Spencer said of his assignment. He thanked his family for their patience over the years, as his work often requires long hours and extended time in the field. “And Tony D’Alosio. He was very instrumental in my development professionally and personally, preparing me for the role.”

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The JetBlue / Spirit Merger and the Threat to Job Security

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The JetBlue-Spirit Merger and the Risk to Job Security

Organizing
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The JetBlue and Spirit merger presents a significant risk to the job security of those workers who do not have contractual employment protections. Why?

“Asset divestitures can smooth the way to antitrust approval.We have a path to close this deal,”
-CEO Robin Hayes

The JetBlue-Spirit merger will have to receive approval from the federal government to be finalized. With airfares soaring and countless operational problems, it is expected that the Biden Administration will be VERY apprehensive to approve any airline merger. This is especially true for the JetBlue-Spirit merger, as the Biden Administration has already sued JetBlue and American, alleging the airlines’ Northeast Alliance is a de facto merger that hurts competition in the New York and Boston markets. So what will JetBlue have to do to gain regulatory approval for its merger with Spirit?

Two words: Divest operations to address the issue of competition. So, for example, where JetBlue and Spirit both have significant operations—think FLL, MCO and other locations—to gain approval for the merger JetBlue will have to give up a portion of its flight schedule to other airline/s. That means JetBlue is bound to divest in many locations, which means a reduction of the current combined flights of Spirit and JetBlue. And that affects jobs. 

And, if the merger is ultimately approved, a big if, it will not happen until the first half of 2024. A lot can happen in 15-18 months. There can be an economic slowdown, happening now as the GDP has decreased in the last two quarters, or a significant change in the leadership philosophy of the combined carrier. 

JetBlue management’s objective, as stated in its latest second-quarter earnings report, is to get the merger with Spirit approved and to implement a severe cost containment strategy with its newly announced “Enterprise Planning Team.” 

What does that mean for outsourcing and general job security? Future wage and benefit improvements? Work rule enhancements? 

The only way that JetBlue GO Crewmembers will be able to have a say in their future is by having a seat at the table. Not by being on the menu.

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Machinists Union: Defending Workers’ Rights is the Top Priority in JetBlue-Spirit Tie-Up

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Machinists Union Says Defending Workers’ Rights is the Top Priority in JetBlue-Spirit Tie-Up

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8 July 2022

JetBlue Airways and Spirit Airlines this morning announced that the two airlines plan to merge to create the nation’s fifth largest carrier. Spirit Airlines shareholders yesterday rejected Frontier Airlines’ bid to merge and cleared the way for JetBlue’s $3.8 billion all-cash offer to combine the two carriers.

“As we know from the history of airline mergers and acquisitions, top executives will promise the world to gain regulatory approval. But, when the dust is settled and approval is granted, airline workers almost always get the short end of the stick,” said IAM Air Transport General Vice President Richard Johnsen. “The Machinists Union is the most powerful and experienced union when it comes to defending airline workers’ rights during mergers. We have done it before and we will do it again. IAM members at Spirit Airlines and future IAM members at JetBlue Airways will have their interests defended, just as every IAM member has during previous mergers.”

It’s expected that the proposed merger will face stiff regulatory approval from the Biden Administration. JetBlue already faces opposition from the Justice Department, which has sued to break up its commercial agreement with American Airlines Group Inc. The regulators allege that the partnership — which targets the New York and Boston markets — is anti-competitive.

“I want all IAM members at Spirit Airlines to know the Machinists Union will ensure your contract is enforced during this process and that your rights will be defended,” continued Johnsen. “I also want all the JetBlue Ground Operations Crewmembers to know that your campaign to gain IAM representation takes on even more importance now. It is urgent that you have a seat at the table, so you’re not on the menu.”

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Machinists Union Contract Will Remain In Effect After Spirit / Frontier Merger

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8 February 2022

Machinists Union Contract Will Remain In Effect After Spirit / Frontier Merger

As you are aware, Spirit Airlines has entered into a merger agreement with Frontier Airlines. First and foremost, I want you to know that our newly-ratified contract with Spirit remains in full force, including essential provisions that protect ramp workers’ jobs, seniority, and wages, among other vital protections, during a merger. 

Article One (Section G) of the Agreement between your union and Spirit Airlines contains Merger Protections that will specifically protect the seniority rights of union members. Our contract requires that any seniority integrations with non-union employees at Frontier be fair and that all union rights be respected. Additionally, Article Three (Section I) states very clearly, “The Company shall not outsource any Ramp Service work at its FLL station during the term of this Agreement.” 

Undergoing a merger can be stressful for non-union employees who lack the protection of a legally-binding union contract. However, I want to reassure all union members that our agreement will remain legally binding for the new company. I encourage everyone to study these contractual rights and how well they protect union members at Spirit. Machinists Union Members can find the Spirit Agreement online at IAM141.org. Look for the Spirit Contract under the “Airlines and Agreements” tab. 

Over the next few weeks, we will be working with Spirit to ensure that the rights of Machinists Union members are respected and that every provision of our collective bargaining agreement is honored. If you have any questions or concerns about this topic, please do not hesitate to contact Assistant General Chair Tony Gibson by email at tgibson@IAM141.org or by phone at (313) 815-9622.

In Solidarity,

Michael G. Klemm

President & Directing General Chair,
IAMAW District 141

Recording Secretaries: Please print and post on all IAMAW bulletin boards.

98% At Spirit Vote YES on New Contract!

98% At Spirit Vote YES on New Contract!

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98% At Spirit Vote YES on New Contract!

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Following nearly seven months of concentrated negotiations, union members at Spirit Airlines voted to approve a five-year contract with the airline by an astonishing 98% margin. 

The agreement will include retroactive pay raises, overall compensation hikes, and create new, higher-earning positions for union members to fill. The new deal will also give paid vacations to part-time workers for the first time. Previously, part-time agents at Spirit were only given unpaid time off instead of vacation time. 

The higher wages will bring Spirit ramp workers significantly closer to industry-standard income levels, a long-standing goal for union members at the airline. As the largest transportation and aerospace union in North America, the International Association of Machinists and Aerospace Workers (IAMAW) has played a leading role in establishing wage standards for gate and ticket counter agents in commercial aviation. Contracts negotiated by Machinists-represented airline workers at airlines like American, United, Hawaiian, Southwest, and others have created upwards pressure on airlines to pay their employees well. 

Images courtesy of Tim Nestler

The new Spirit Agreement creates the most significant pay increases for ground workers in the airline’s history. The average wage increase is about 30% and includes retroactive payments dating back to October 24. Before the new contract was ratified by union members at Spirit, the top wage was $15.15 an hour. The highest pay bracket will now increase to $23 an hour, and over the life of the agreement will rise to $24.78.

The new contract will also provide part-time agents with sick pay and doubles the time union members can remain on sick leave and retain their seniority. 

For Lead Negotiator Tony Gibson, the deal represents a victory not only for what it wins – but also for what it doesn’t lose. “We’re coming out of a pandemic right now, the same pandemic that crippled airlines for nearly a year,” Gibson said. “And, despite all that, our members at Spirit didn’t give up anything. This contract will make the Spirit workplace better – and only better. There are no concessions in this agreement.”

The agreement comes just weeks after company negotiators at Spirit had asked that talks enter mediation, a process that could have pulled the brakes on finding a deal before the holidays. Fortunately, the company and union reached a tentative agreement only two weeks later, avoiding time-consuming mediation.

Our members can stand proud in the work of the committee, which held strong for improving the economic provisions that sets a tone of respect on the job and compensation to match” said IAMAW Chief of Staff Richard Johnsen of the agreement. “This proposal is the result of our strong negotiations team and it will help improve the livelihood of each and every member at Spirit Airlines.”

“The negotiating committee held strong with our demands for improved wages and other demands voiced by our members,” Airline Coordinator Tom Regan said. “These hard-working men and women have been on the frontlines of the COVID-19 pandemic. This proposed labor contract rewards that dedication by each and every member who has made sure all Spirit Airlines’ passengers get to their destination safely.”

“I want to thank our IAM Negotiating Committee at Spirit for the outstanding work they’ve accomplished with this agreement. I particularly want to recognize the contributions of Local 368 members Almarie Jean, Linda Germain, Christopher Willis, and Gregory De La Cruz, who helped put this deal together,” said District 141 President and Directing General Chair Mike Klemm. “Along with District 141 Assistant General Chairs Andrea’ Myers, and Lead Negotiator Tony Gibson, this team spent countless hours away from loved ones to create a better workplace for our Spirit membership.”

Below – the IAMAW District 141 Spirit Negotiating Committee. Bottom row, from right: Almarie Jean, Linda Germain, AGC Andrea’ Myers, Chris Willis. Top row, from right: AGC & Lead Negotiator Tony Gibson, Gregory De La Cruz, and IAMAW District 141 President and Directing General Chair, Mike Klemm.

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