Richard Reice Quoted in Crain's New York Business

Crain's reported in the May 8, 2006 article, "Troubled JetBlue faces union threat," that the 3,000 ramp workers at the six-year-old airline, which has been able to avoid union contracts until now, will vote as early as next month on whether to join the International Association of Machinists and Aerospace Workers. IAMAW represents more than 100,000 airline industry workers. JetBlue executives say that a successful union drive would force the discount carrier to significantly alter the way it operates and would raise its costs.

This is just the latest setback for the once-charmed carrier, which quickly blossomed from upstart to the third-biggest airline in the New York market, flying more than 11 million customers annually. In April, JetBlue reported its second straight quarter in the red, with a $32 million loss due to spiking fuel prices and a costly fleet expansion. The deficits occurred as legacy competitors like Delta Air Lines are bouncing back, having used bankruptcy reorganization to aggressively streamline their operations. JetBlue's recent problems are behind the movement to unionize. Ramp service workers at the Forest Hills, Queens-based company are becoming concerned about issues like sick leave, vacation days, pensions and job security, IAMAW officials say.

Unionization would have a profound impact on JetBlue's operations, especially in the ramp service group. The airline currently doesn't distinguish between ramp functions like baggage handling, ticket processing or provisioning airplanes. Workers can move or be moved from job to job as needed. The arrangement helps JetBlue adjust quickly to circumstances and cut down on labor costs. It also allows for easy cross-training of new supervisors, which is important to its further expansion. The jobs would almost certainly be separated if the group were to unionize. JetBlue management would also be subject to collective bargaining pressure on myriad matters, from wages and dismissal procedures to sick days and pensions. JetBlue currently uses "paid time off" for both sick and vacation days. It doesn't offer a defined pension, in which a particular monthly benefit is paid to retirees. Instead, it matches up to 3% of employee contributions to a 401(k) plan. "This is a big issue for JetBlue," says Richard Reice, a labor and employment partner at Seyfarth Shaw. "It could lose a lot of the flexibility in the way it manages employees."