Spirit Airlines 2011 Annual Report Download - page 18

The Railway Labor Act, or RLA, governs our relations with labor organizations. Under the RLA, the collective bargaining agreements
generally do not expire, but instead become amendable as of a stated date. If either party wishes to modify the terms of any such agreement, they
must notify the other party in the manner agreed to by the parties. Under the RLA, after receipt of such notice, the parties must meet for direct
negotiations, and if no agreement is reached, either party may request the National Mediation Board, or NMB, to appoint a federal mediator. The
RLA prescribes no set timetable for the direct negotiation and mediation process. It is not unusual for those processes to last for many months,
and even for a few years. If no agreement is reached in mediation, the NMB in its discretion may declare at some time that an impasse exists,
and if an impasse is declared, the NMB proffers binding arbitration to the parties. Either party may decline to submit to arbitration. If arbitration
is rejected by either party, a 30-day “cooling off” period commences. During that period (or after), a Presidential Emergency Board, or PEB,
may be established, which examines the parties’ positions and recommends a solution. The PEB process lasts for 30 days and is followed by
another “cooling off” period of 30 days. At the end of a “cooling off” period, unless an agreement is reached or action is taken by Congress, the
labor organization and the airline each may resort to “self-help,” including, for the labor organization, a strike or other labor action, and for the
airline, the imposition of any or all of its proposed amendments and the hiring of new employees to replace any striking workers. Congress and
the President have the authority to prevent “self-help” by enacting legislation that, among other things, imposes a settlement on the parties. The
table below sets forth our employee groups and status of the collective bargaining agreements.
We focus on hiring highly productive employees and, where feasible, designing systems and processes around automation and outsourcing
in order to maintain our low-cost base.
Safety and Security
We are committed to the safety and security of our passengers and employees. Some of the safety and security measures we have taken
include: aircraft security and surveillance, positive bag matching procedures, enhanced passenger and baggage screening and search procedures,
and securing of cockpit doors. We strive to comply with or exceed health and safety regulation standards. In pursuing these goals, we maintain
an active aviation safety program and all of our personnel are expected to participate in the program and take an active role in the identification,
reduction and elimination of hazards.
Our ongoing focus on safety relies on training our employees to proper standards and providing them with the tools and equipment they
require so they can perform their job functions in a safe and efficient manner. Safety in the workplace targets several areas of our operation
including: flight operations, maintenance, in-flight, dispatch, and station operations. The Transportation Security Administration, or TSA, is
charged with aviation security for both airlines and airports. We maintain active, open lines of communication with the TSA at all of our
locations to ensure proper standards for security of our personnel, customers, equipment and facilities are exercised throughout the operation.
Insurance
We maintain insurance policies we believe are of types customary in the airline industry and as required by the DOT. The policies
principally provide liability coverage for public and passenger injury; damage to property; loss of or damage to flight equipment; fire and
extended coverage; directors’ and officers’ liability; advertiser and media liability; cyber risk liability; fiduciary; and workers’
compensation and
employer’s liability. We have obtained third-party war risk (terrorism) insurance through a special program administered by the FAA, resulting
in lower premiums than if we had obtained this insurance in the commercial insurance market. Should the government discontinue this coverage,
obtaining comparable coverage from commercial underwriters could result in substantially higher premiums and more restrictive terms, if it is
available at all. Although we currently believe our insurance coverage is adequate, there can be no assurance that the amount of such coverage
will not be changed or that we will not be forced to bear substantial losses from accidents.
Foreign Ownership
Under DOT regulations and federal law, we must be controlled by U.S. citizens. In order to qualify, at least 75% of our stock must be
voted by U.S. citizens and our president and at least two-thirds of our board of directors and senior management must be U.S. citizens.
15
Employee Groups Representative Status of Agreement/Amendable Date
Pilots Airline Pilots Association, International (ALPA) Becomes amendable on August 1, 2015.
Flight Attendants Association of Flight Attendants (AFA) In negotiation. Became amendable in 2007.
Dispatchers Transport Workers Union (TWU) Becomes amendable in July 2012.