#alaskaunseen

Mega merger could mean inferior customer service for travelers and poverty wages for workers

Portland, Ore. — Dirty tray tables. Lost luggage. Poverty wages. These are just some of the problems Virgin America (NASDAQ: VA) customers and workers may experience if the airline’s shareholders approve its acquisition by Alaska Air Group (NYSE: ALK). Virgin America shareholders will vote on the proposed deal tomorrow in a special online meeting.

Since the merger was announced in April, Virgin America customers have voiced concern that the merger will mean a downgraded flying experience and a loss of the best-in-class features they enjoy.[i] Observers are raising concerns that may make shareholders think twice about the deal, due to potential downgrades for Virgin customers and workers.

The top five concerns:

1.     Basic hygiene: In February 2016, workers subcontracted by Alaska to clean Alaska Airlines planes at Portland International Airport received a memo directing them to skip cleaning tray tables in the main cabin on many flights[ii]. Alaska initiated this “no-clean” policy in spite of evidence that it could allow harmful microbes like E. Coli, influenza and norovirus to thrive.[iii] [iv]

2.     “Blah airlines” customer experience: Virgin has pioneered innovative customer experiences like touch-screen food and drink ordering, entertainment screens for every passenger, and Netflix streaming.[v] [vi] As Alaska continues to grow, some industry observers have noticed a declining customer experience that can include rusting tray tables, “worn and frumpy” seats, and an airline magazine in place of a seat-back screen.[vii]

3.     Lost bags: From August 2014 to August 2015, reports of mishandled baggage on Alaska increased by 58 percent. No luggage was safe—the airline even lost CEO Bradley Tilden’s bag, Tilden admitted.[viii]

4.     Unsafe working conditions: Earlier this year and in 2013, Alaska Airlines and its contractor Menzies Aviation were cited by the State of Washington for health and safety violations related to unsafe working conditions.[ix] (The employers have appealed.) The investigations in 2013 revealed that Alaska and its contractor failed to protect staff from exposure to faulty equipment, corrosive cleaning chemicals, caustic jet fuel, blood-borne pathogens, and body fluids including vomit, urine, feces and blood.[x]

5.     Poverty wages: In Portland, Oregon, an Alaska Airlines hub, subcontracted Alaska workers, including ramp agents, baggage handlers, fuelers, cabin cleaners and janitors, make poverty wages as low as the minimum wage of $9.75 an hour. The average wage for these workers is $11.36 an hour, or $23,629 per year.[xi] A recent report from the University of Washington estimated it would cost Alaska $2.25 million—or 0.27 percent of the company’s reported total net income in 2015—to increase hourly wages to $15 for non-supervisory subcontracted employees at Portland International Airport (PDX). [xii] At Seattle-Tacoma International Airport, Alaska’s main hub, the airline has sued multiple times to avoid paying workers the voter-approved minimum wage of $15.24 an hour. State courts ruled against Alaska, finding that the wage law was legal and applied to airport workers.[xiii].

“I see shareholders cashing out on this deal, but I’m still struggling every day to get by,” said Tina Cummins, a cabin cleaner and subcontracted worker for Menzies Aviation. “After nine years on the job, I'm still making just $12 an hour and sometimes I feel unsafe on the job. I hope Alaska uses this merger to invest in the people on the ground and the customers we serve, but it isn’t clear that they have our best interests in mind.”

“While a merger could lead to even lower workplace standards, we know that increasing pay for workers produces widespread economic benefits,” said Garrett Strain, author of the University of Washington report on the economic impacts of wages at Portland’s airport. “If Alaska were to increase wages for outsourced workers, it could boost local spending in Portland by more than $7 million and create more than 80 new jobs for the regional economy.”

SEIU Local 49 represents more than 11,000 building service and health care workers, including workers at Portland International Airport. The Service Employees International Union is the nation’s largest property service union in the country.

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[ii] “Recent Memo to PDX Workers Who Clean Alaska Airline Planes.” Facebook. Our Airport, March 16, 2016. https://www.facebook.com/ourairport/photos/a.348604211966707.1073741828.347860105374451/558039941023132/?type=3&theater.

[iii] DiSalvo, David. “Study: Airplane Tray Tables Carry Much More Than Your Soda And Pretzels.” Forbes, May 20, 2014. http://www.forbes.com/sites/daviddisalvo/2014/05/20/study-airplane-tray-tables-carry-much-more-than-your-soda-and-pretzels/

[iv] Bartiromo, Michael. “Protect Yourself From Germs on Airplanes.” FOX News Magazine, July 5, 2011. http://magazine.foxnews.com/food-wellness/protect-yourself-germs-airplanes

[v] Krupnick, Matt. “Virgin America Fans Ask if Alaska Airlines Takeover Will Mean Loss of Cool.” New York Times, April 11, 2016. http://www.nytimes.com/2016/04/12/business/virgin-america-fansaskif-alaska-airlines-takeover-will-mean-loss-ofcool.html

[vi] Sanati, Cyrus. “Virgin America Can Help Alaska Airlines Up its Game on Several Fronts.” Fortune, April 5, 2016. http://fortune.com/2016/04/05/virgin-america-can-help-alaska-airlines-up-its-game-on-several-fronts/

[vii] Robinson, Melia. “Here's what it's like to fly on Alaska Airlines, which is buying Virgin America.” Tech Insider, April 24, 2016. http://www.techinsider.io/alaska-airlines-versus-virgin-america-2016-4

[viii] Castrodale, Jelisa. “Alaska Airlines did not have the best month for keeping track of passengers' luggage.” USA Today, October 28, 2015. https://usattravel.wordpress.com/2015/10/28/alaska-airlines-did-not-have-the-best-month-for-keeping-track-of-passengers-luggage/

[ix] Wilhelm, Steve. “Alaska Airlines, baggage-handler Menzies fined by labor regulators.” Puget Sound Business Journal, March 8, 2016.

[x] “SEIU: Alaska Airlines, contractor Menzies Aviation cited for failing to maintain safe workplace at Sea-Tac Airport.” PR Newswire, March 7, 2016. http://www.prnewswire.com/news-releases/seiu-alaska-airlines-contractor-menzies-aviation-cited-for-failing-to-maintain-safe-workplace-at-sea-tac-airport-300231799.html

[xi] Strain, Garrett. “Poverty Doesn’t Fly.” Harry Bridges Center for Labor Studies, University of Washington, June 2016, p. 19. http://depts.washington.edu/pcls/documents/StrainPDX_Poverty_Doesnt_Fly_June2016-c5.pdf  

[xii] Strain, Garrett. “Poverty Doesn’t Fly.” Harry Bridges Center for Labor Studies, University of Washington, June 2016. http://depts.washington.edu/pcls/documents/StrainPDX_Poverty_Doesnt_Fly_June2016-c5.pdf