Southwest to ‘trim headcount’ after growth in costs

[SIU 130]

The CEO of Southwest Airlines Co., Gary Kelly, announced that the airline plans to cut about $100 million in expenses by “trimming our total headcount complement overall,” as a result of higher fuel prices hampering the carrier’s growth.
In a conference call with Bloomberg News, Kelly said there are no immediate plans for layoffs but the company will be mindful of expenses as a result of “a reflection of concerns about high fuel prices and economic uncertainty.” He did not outline how a trim to employee numbers would be accomplished, Bloomberg said.
The company saw its costs grow by 13 percent in first nine months of 2012 while revenue grew by 12 percent, Bloomberg said.




.....................Gary, I have about 717 good ideas for you.

 

[dalad]

The beginning of the end. There GL, I beat you to it. SWA guys and gals , that was TIC.

 

[jonjuan]

The beginning of the end. There GL, I beat you to it. SWA guys and gals , that was TIK.

What's TIK?

 

[Donald]

Southwest offers an exit bonus plan every few years to reduce man power in various work groups. It sounds like they will be doing another one soon. I not sure when the last one was that was offered to pilots though.

 

[BILL LUMBERG]

nothing to see here people......

 

[General Lee]

These aren't the droids we're looking for. Move along. Move along.


No, seriously, I hope nobody gets laid off or furloughed. That would be bad, and I hope the SWA/AT guys do not have to go through that, ever.



Bye Bye---General Lee

 

[Lear70]

Some of the bigwigs had JUST flown back in from Dallas as we were finishing recurrent ground yesterday and they stopped by class. Of course, that's the first question I asked, what the heck does he mean by that?

The answer was pretty simple: there is a LOT of overlap in ground operations personnel throughout the entire system now, especially in cities where we both had a lot of presence but may trim back slightly and re-deploy the assets other places, for instance, MCO-BWI where we overlap quite a bit of traffic and don't need to.

The big spotlight is on Dallas... with the training center personnel combined, schedulers, dispatchers, I.T. (although a LOT of our I.T. people have been bailing since they're non-unionized which is unfortunate since our I.T. dept has been pretty decent, all things considered), and other office administration, the overhead from all that is quite a bit higher than it really needs to be.

As a result, as more departments are incorporated to Dallas, those who don't want to make the move and resign will not be replaced. Additionally, people in Dallas who resign will not be replaced and if it shorts a department, they may offer incentives for people to switch from personnel-heavy departments into those that were deficient, thereby "lowering the total head count".

With SWA still quite profitable from a yearly Net income perspective and that only improving as we connect the dots via code share next year, continue combining operations, and reducing overhead as mentioned above, that profit is only going to improve, barring further increase in oil prices or a further downturn in the economy. (did anyone else appreciate his comments aimed at the Presidential election regarding the worsening economy? got a chuckle out of me...)

Therefore, with profits in a livable range and only improving, no one should be worried about furloughs. We also asked how the they intended on getting all of us through training by 1/1/15, and they stated that they can train 1,096 pilots per year. I then asked how they planned on doing that when the most they had ever taken in one month was 48 and which we heard was running the sims non-stop between those and recurrent people and stressing the check airman program. They simply said those were the numbers the training dept said they could handle.

We also asked what the exact fleet numbers were over the next two years, including the 717's being sub-leased to Delta. We are sub-leasing 88 717's to Delta. SWA is taking delivery of 36 replacement aircraft this year, 20 next year, and 30 in 2014, bringing the hull numbers to 86 replacement 737's by 1/1/15, which coincides with "flat" fleet growth. In addition, attrition will drive around 300 retirements in 2013 and 2014 which corresponds to about 1,000 total SWA pilot upgrades in the 3 year period of the transition, or about 1/3 of the pre-merger SWA F/O's, over half of those upgrades were not planned before the acquisition.

After that, the list will "normalize" over a 2-3 year period, re-upgrading all our displaced CA's that can hold it by seniority (which by 2017 is close to 450), and then (2017-2018) the fleet will be re-evaluated (retirements/replacements of aircraft). They also said they are starting to put the new seats in the -300's, indicating that the airplane will be around at least as long as it takes to recoup that investment (5-7 years is what we heard before on that).

All this in the FWIW files.

 

[BILL LUMBERG]

Without the fine level commentary of wave or SwaBubba or Canyon......IMHO I think this is not a big deal.

Nobody is going to get laid off.....all the naysayers are circling wagons, but its not gonna happen.

 

[humveedriver]

In addition, attrition will drive around 300 retirements in 2013 and 2014 which corresponds to about 1,000 total SWA pilot upgrades in the 3 year period of the transition, or about 1/3 of the pre-merger SWA F/O's, over half of those upgrades were not planned before the acquisition.

After that, the list will "normalize" over a 2-3 year period, re-upgrading all our displaced CA's that can hold it by seniority (which by 2017 is close to 450), and then (2017-2018) the fleet will be re-evaluated (retirements/replacements)

Lear,

Good post. Something I don't understand is where 1000 upgrades occur from 300 retirements. I know using Jamie's calculator I look at upgrade in 2018 as a high 400 AT pilot, so the other numbers make sense, I just don't get the formula.

It would be impressive to see SWA train everyone by 1/2015. Sometimes I think George McClellan is running the airline.

 

[Lear70]

Lear,

Good post. Something I don't understand is where 1000 upgrades occur from 300 retirements. I know using Jamie's calculator I look at upgrade in 2018 as a high 400 AT pilot, so the other numbers make sense, I just don't get the formula.

It's a combination of the CA seats they gain from our 737 CA's losing their seats plus the 86 new 737 deliveries during the integration, most of which they weren't expecting to take delivery of pre-acquisition announcement, (deliveries which were originally offset by -300 retirements and now they're keeping them since our 717's are going away), plus the attrition numbers.

All of that is 1,000 SWA F/O upgrades by 1/1/15 (round numbers give or take) during the integration.

It would be impressive to see SWA train everyone by 1/2015. Sometimes I think George McClellan is running the airline.

LOL - well, I still have my doubts, but we'll see...