Alaska and Virgin America pilots have been awarded big pay increases through an arbitration ruling. The arbitration ruling awarded the pilots bigger increases than Alaska Airlines management had sought, but less than the increases sought by pilots. Senior Captains from both air carriers will see their pay increase to $251 an hour, effective today. Senior Captains at Alaska Airlines had been earning $216 per hour, while a senior Captain at Virgin America had been earning $189 per hour. That equates to an increase of 16% for Alaska pilots, and almost 33% for Virgin America pilots. While the new agreement also includes some additional improvements to retirement plan contributions, the union did lose its bid to prevent the company from flying larger regional jets.
The Alaska Air Group closed its acquisition of Virgin America in December of 2016. The merger combined two airlines that were at the top of the customer satisfaction rankings in the United States. However, Alaska’s $2.6 billion acquisition of Virgin America allowed the pilots union to re-negotiate compensation talks due to a clauses in their contract. This increase in pilot pay now comes on the heels of Alaska missing its earnings estimates last week as higher fuel price contributed to soaring costs. Revenue was also hurt by a price war in the California market, and Southwest Airlines has just announced it will soon begin service to Hawaii. The Southwest effect, the term that has been coined to reflect a drop in airfare prices anytime Southwest enters a new market, could also affect Hawaiian revenue in future quarters.
Virgin America was founded in 2004, and began operations out of San francisco International Airport in 2007. The new air carrier became the first airline in the United States to offer Wi-Fi internet on every flight in May of 2009. The airline began service to Toronto from both Los Angeles and San Francisco in June of 2010. Virgin America began flying to Dallas/Fort Worth International Airport in December 2010, and ended its service to Toronto in April of 2011. Following the repeal of the Wright Amendment in October 2014, the carrier moved their Dallas operations over to Love Field. Virgin America announced an order for 60 new Airbus A320’s, with the order split down the middle between the existing model and the NEO (New Engine Option model) in January of 2011. The Alaska Air Group has announced plans to retire the Virgin America brand sometime in 2019.
