Flight attendants at JetBlue Airways (NASDAQ:JBLU) have rejected a tentative contract agreement forged between the airline and union leaders, adding an additional layer of uncertainty at a time when the airline is already dealing with a pandemic-related slowdown.
The airline's flight attendants voted to unionize in April 2018, and the company and the Transport Workers Union (TWU) have been in talks about a contract. The two sides struck a deal late last month, subject to approval from the union's 5,000 members.
JetBlue said Friday afternoon that the agreement was rejected by union memberships, though it did not disclose the margin of defeat.
"We are disappointed in the results of the vote," Ian Deason, JetBlue's head of customer experience, said in a statement. "Both the TWU and JetBlue worked through unprecedented circumstances to reach an agreement that was fair to our inflight crewmembers. We will work with TWU to determine next steps."
The rejection is a blow to JetBlue as it attempts to minimize costs to ride out the COVID-19 crisis. Airlines have seen travel demand evaporate due to the pandemic, with JetBlue forecasting fourth-quarter revenue to be down 65% year over year.
There is no immediate risk of a strike or a work stoppage. Under the Railway Labor Act, which governs airline union negotiations, the two sides will return to the table for new talks. But given how industry conditions have deteriorated in the two years since the initial union drive, it is far from certain the union will be able to extract better terms in the new round of negotiations.