Virgin America Flight Attendants Vote to Create First Union

Aug 13, 2014 3:23 pm ET

(Updates with company comment in seventh paragraph.)

Aug. 13 (Bloomberg) -- Virgin America Inc. flight attendants voted to establish the first union at the airline partly owned by U.K. billionaire Richard Branson, ending its status as the largest U.S. carrier without organized labor.

Collective bargaining with the Transport Workers Union raises the prospect of higher operating costs for the airline, which filed July 28 for an initial public offering. The carrier reported second-quarter net income of $37 million yesterday after posting its first annual profit in 2013.

Today’s vote follows a decision in April by pilots at JetBlue Airways Corp. to join the Air Line Pilots Association, ending that carrier’s status as the largest nonunion U.S. airline at that time. JetBlue flight attendants also are seeking an election on TWU representation.

“With this vote, flight attendants will have a say on how to further improve Virgin along with their own work lives,” John Samuelsen, TWU International executive vice president, said in a statement. “This is a chance to make the airline better for both customers and workers.”

Virgin America’s attendants supported the TWU with 58 percent of the ballots cast, the labor group said. It was the second union vote for attendants at Burlingame, California-based Virgin America, who rejected the union in December 2011.

‘Inflight Teammates’

The TWU said 828 employees were eligible to cast ballots. Negotiations for a first contract will begin later this year.

“We respect the decision by our inflight teammates to choose third-party representation,” Jennifer Thomas, a spokeswoman for Virgin America, said in an e-mail. “We will continue to work to serve the best interests of all of our teammates and our airline as we move forward.”

Virgin America, which started service in August 2007, has a fleet of 53 Airbus SAS A320 single-aisle jets and flies to destinations including San Francisco, Los Angeles, Las Vegas, New York’s John F. Kennedy airport and Boston.

Branson’s Virgin Group owns a 22 percent stake in Virgin America through VX Holdings LP, while Cyrus Capital Partners LP, a New York-based investment adviser, holds 72 percent. The rest of the U.S.-held stake is owned by a group of investors including Virgin America Chairman Donald Carty, a former chief executive at American Airlines.

David Cush, a former American Airlines global sales manager, took over as Virgin America’s chief executive officer in December 2007, four months after the carrier began flights. He holds a 7.7 percent stake.

--With assistance from Michael Sasso in Atlanta.