Release #: SPA 16.01
April 29, 2016
Spirit Pilots Reject CEO Placing Their Compensation in Lowest “Tier” of Industry
With industry-leading profits, Spirit pilots press for industry-standard compensation
MIRAMAR, FL—Today, the pilots of Spirit Airlines, as represented by the Air Line Pilots Association, Int’l (ALPA), responded to statements made by Spirit CEO Robert L. Fornaro on the April 26 quarterly earnings call. During the call that announced better than expected pretax margins of 21.3 percent, Fornaro was asked about ongoing pilot negotiations and the rapid rise of pilot compensation at other carriers. Fornaro responded that the industry is tiered, and Spirit is firmly in the lowest tier along with Frontier and Allegiant. He suggested that this lowest tier is Spirit’s “peer group.”
“Based on these statements, Mr. Fornaro seems to imply that Spirit pilot compensation must also remain in the lower tier and tied to carriers whose pay rates and working conditions were either diminished by bankruptcy or unilaterally set without bargaining,” said Capt. Stuart Morrison, chairman of the Spirit unit of ALPA. “Simply put, this is a bogus assertion. Spirit’s profit margin—a much more relevant metric than ticket pricing—puts the company well into the industry’s upper tier.”
Delta, American, United, Southwest, and JetBlue also fly most of the routes operated by Spirit pilots. In markets across the country, Spirit has aggressively and successfully competed against these airlines. Meanwhile, the pilots at these carriers currently enjoy profit sharing and vastly superior rates of pay and retirement benefits.
Fornaro continued in his response to assert that the primary benefit for Spirit pilots is “fast growth, our pilots become captains much earlier than their peers.” However, with pilot retirement at historic levels, the legacy carriers currently offer upgrade opportunities to the captain seat, and/or to higher paying aircraft, earlier than Spirit. Additionally, many Spirit captain rates are lower than legacy first officer rates.
“Spirit pilots are not prepared to embark on the fool’s errand of accepting substandard pay and retirement based on the unenforceable hypothesis that the Company may grow more quickly. Our ‘peers’ throughout the industry have uniformly and properly rejected agreements based on that theory,” continued Capt. Morrison. “Most importantly, the low-cost carrier model does not require ‘discount’ pilots to succeed. We are a vital part of Spirit’s success—and should be compensated accordingly. We will settle for nothing less.”
Read the full transcript of Fornaro’s statement on the April 26, quarterly earnings call.
Spirit pilots are currently in negotiations with management while working under a five-year agreement that is eight months past the amendable date.
Founded in 1931, ALPA is the largest airline pilot union in the world and represents over 52,000 pilots at 30 U.S. and Canadian airlines. Visit the ALPA website at www.alpa.org or follow us on Twitter @WeAreALPA.
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CONTACT: ALPA Media, 703-481-4440 or Media@alpa.org