AFA confirmed with Alaska Air Group (AAG) management that the dates already publicly established are still valid targets, so we have put together a brief timeline and explanation of how the merger might play out. It is important to keep in mind that the timeline could change and the below dates are estimates.
Timeline for the Corporate Merger
The Department of Justice (DOJ) must approve the acquisition and determine that it does not violate any anti-trust laws or regulations. The actual conclusion of the financial transaction will happen a few days after the DOJ blesses the deal. Virgin America (VX) is anticipated to officially become a subsidiary of AAG in early October 2016.
What will happen to Virgin America teammates after the close of the merger in early October?
Some Virgin America management personnel have been offered a role at the combined company contingent upon the acquisition closing. All non-management teammates who are represented by labor groups will continue to have employment.
What exactly is “integration” and when will it happen?
It is important to understand that “integration” applies to many steps along the way to completely combining the two carriers:
- Integration of corporate managementand departments (Labor Relations, Legal, Finance, etc.) is one aspect of integration and will happen quickly after the close of the corporate merger.
- Operational integration of policies, maintenance procedures and manuals, etc., which leads up to a Single Operating Certificate (SOC), takes over a year. In most previous mergers achieving SOC has taken even longer.
- Labor Integration—including seniority list integration, negotiating the Joint Collective Bargaining Agreement (JCBA) and finalizing a process agreement that allows for a smooth and orderly combining of the two labor groups—will be implemented only after operational integration (above) is finalized.
There is no absolute date or totally predictable time frame for any of these processes to roll out. Management has set benchmarks as to when they would like to see these milestones achieved:
- Integration of corporate management will start in October.
- Operational integration is slated for the first quarter of 2018.
- Labor Integration will depend on many variables: the actual timetable for operational integration, the National Mediation Board’s ruling on single carrier status (see below), vetting the seniority lists leading up to seniority integration and the actual negotiating of the JCBA.
When will AFA represent both Alaska Airlines Flight Attendants and Virgin America Inflight Teammates (ITMs)?
Once the corporate merger closes and Alaska Air Group management has taken sufficient steps to merge the airlines, AFA will then petition the National Mediation Board (NMB) to rule that Alaska Airlines and Virgin America constitute a “single transportation system,” or commonly referred to as a “single carrier” or “single carrier status.” The NMB has a well-established standard to determine whether carriers constitute a single transportation system, which looks at factors such as the integration of operations, advertising, and the merger of management including labor relations and personnel functions.
This process could take several months or more after the close of the corporate transaction. While the unions control the timing of filing for single carrier determination, the NMB controls the timing of the decision.
Once the NMB determines that there is a single transportation system, AFA will become the representative of VX ITMs. The Transport Workers Union of America (TWU), the union that currently represents the VX ITMs, has agreed to support AFA’s position before the NMB.
After the single carrier ruling, a joint negotiating team comprised of Alaska Airlines Flight Attendants and Virgin America ITMs will negotiate with management to achieve a transition agreement, which will govern how the two groups will be integrated. The Joint Collective Bargaining Agreement will come later in the process.
AAG management’s plan is to combine Alaska Airlines and Virgin American into one airline. There has been a lot of speculation and rumor–but management has consistently stated—and reconfirmed to AFA—that the plan is to bring both carriers together under one operating system or “Single Operating Certificate.” Elements unique to each carrier may be combined in the final product that will be the new Alaska Airlines. Management’s target for this milestone is 1st quarter 2018.
Does the fact that the VX ITMs voted down their Tentative Agreement change anything about this timeline or integration?
No. The result of the vote does not change the situation.
Future updates as information becomes available
When AFA has more information, we will distribute that news. At this moment, the communication above represents what is known about the merger situation and timeline targets.
Your MEC – Jeffrey Peterson, Brian Palmer, Yvette Satterlee, Lisa Pinkston, Laura Masserant, Cathy Gwynn, Tim Green and Brice McGee