SOUTHWEST AIRLINES CO.
Gary C. Kelly Chairman of the Board, President & Chief Executive Officer
P.O. Box 36611 Dallas, Texas 75235-1611 (214) 792-4363
To: From: Date: Subject:
All Southwest and AirTran Pilots Gary Kelly August 22, 2011 Integration status
I am writing you today to let you know my thoughts on the ALPA MEC decision not to put the proposed agreement out to a vote. I also want to thank you all for what you do, every day. I appreciate your excellence, your professionalism, and your respectfulness. It has been my honor to witness it for the last 25 years.
I was disappointed that the ALPA MEC chose to reject the offer. In my opinion, the preferred way to a fair and equitable solution is through negotiation, not arbitration. All Pilots should have their say in their future. Since a negotiated agreement has not been reached, despite our best efforts, we will continue to consider all other options, in addition to arbitration. Our decision will be based on what is best for our People, our business, and our Culture. As the first of our next steps, we have withdrawn our economic offer of support for the SLI package. Due to the worsened economic environment this summer, coupled with the fact that the SLI can no longer be expedited, we cannot afford the previous offer.
We made clear that if an expedited agreement could not be reached, we would revaluate our plan in light of worsening economic conditions. We recently reported consolidated second quarter earnings results, which were down almost 50 percent compared to a year ago. Simply put, reevaluating the integration plan is mandatory in this economic climate. We must not lose sight that we must keep our Company financially strong and healthy. Losing that will certainly affect the Culture and future job security.
AirTran has been bought and is now owned by Southwest. Once the AirTran network is optimized and connected to Southwest, it will be much more profitable. Ultimately this opportunity is worth a great deal to our business and, therefore, each and every Employee. It is in everyone’s self-interest to make it work. I want to thank all those who worked very hard to negotiate the package that included integrating the seniority lists. While some did not like it, it provided benefits for everyone. That was the goal. The Company certainly made a generous economic offer to facilitate the seniority list, and SWAPA worked very hard to make it happen, as did ALPA’s Merger Committee.
As you all know, this is an extraordinarily tough business. In this treacherous airline industry, Southwest's 40 year history of operational excellence, prosperity, and job security stands alone. We have always changed to meet a changing world, and have done so without impairing our Culture. That is a true testament to all of our People, and certainly our Pilots. We want to stand alone, and we want to be the best.
But being the best means we must continue to adapt. We must find a way to grow our airline, and are doing that through our four strategic initiatives: acquiring AirTran; upgrading our Rapid Rewards Frequent Flyer program; adding the -800s; and replacing our Reservations system. Accomplishing these four initiatives is a very ambitious plan. We have pulled out all the stops in order to keep our airline healthy, and grow it. That is to the benefit of our Company, our stakeholders, and certainly our Pilots. Our future success is founded on these strategic initiatives. That said, we now find ourselves with a stalled economic recovery, a cloudy outlook for air travel, and 40 percent higher (and record) energy costs. Those realities cannot be ignored. While we may not be able to grow immediately, our strategic initiatives serve to cushion us from even worse economic times, as compared to where we would be without them.
Moving forward, I would ask that everyone take a deep breath and remain calm as we work through next steps. I would ask you to avoid rumors and focus on factual communications, and as always, continue your excellence, your professionalism, and your respectfulness. Finally, thank you again for all that you do for our Company and our Customers each and every day.
Fly Safe!
Gary C. Kelly Chairman of the Board, President & Chief Executive Officer
P.O. Box 36611 Dallas, Texas 75235-1611 (214) 792-4363
To: From: Date: Subject:
All Southwest and AirTran Pilots Gary Kelly August 22, 2011 Integration status
I am writing you today to let you know my thoughts on the ALPA MEC decision not to put the proposed agreement out to a vote. I also want to thank you all for what you do, every day. I appreciate your excellence, your professionalism, and your respectfulness. It has been my honor to witness it for the last 25 years.
I was disappointed that the ALPA MEC chose to reject the offer. In my opinion, the preferred way to a fair and equitable solution is through negotiation, not arbitration. All Pilots should have their say in their future. Since a negotiated agreement has not been reached, despite our best efforts, we will continue to consider all other options, in addition to arbitration. Our decision will be based on what is best for our People, our business, and our Culture. As the first of our next steps, we have withdrawn our economic offer of support for the SLI package. Due to the worsened economic environment this summer, coupled with the fact that the SLI can no longer be expedited, we cannot afford the previous offer.
We made clear that if an expedited agreement could not be reached, we would revaluate our plan in light of worsening economic conditions. We recently reported consolidated second quarter earnings results, which were down almost 50 percent compared to a year ago. Simply put, reevaluating the integration plan is mandatory in this economic climate. We must not lose sight that we must keep our Company financially strong and healthy. Losing that will certainly affect the Culture and future job security.
AirTran has been bought and is now owned by Southwest. Once the AirTran network is optimized and connected to Southwest, it will be much more profitable. Ultimately this opportunity is worth a great deal to our business and, therefore, each and every Employee. It is in everyone’s self-interest to make it work. I want to thank all those who worked very hard to negotiate the package that included integrating the seniority lists. While some did not like it, it provided benefits for everyone. That was the goal. The Company certainly made a generous economic offer to facilitate the seniority list, and SWAPA worked very hard to make it happen, as did ALPA’s Merger Committee.
As you all know, this is an extraordinarily tough business. In this treacherous airline industry, Southwest's 40 year history of operational excellence, prosperity, and job security stands alone. We have always changed to meet a changing world, and have done so without impairing our Culture. That is a true testament to all of our People, and certainly our Pilots. We want to stand alone, and we want to be the best.
But being the best means we must continue to adapt. We must find a way to grow our airline, and are doing that through our four strategic initiatives: acquiring AirTran; upgrading our Rapid Rewards Frequent Flyer program; adding the -800s; and replacing our Reservations system. Accomplishing these four initiatives is a very ambitious plan. We have pulled out all the stops in order to keep our airline healthy, and grow it. That is to the benefit of our Company, our stakeholders, and certainly our Pilots. Our future success is founded on these strategic initiatives. That said, we now find ourselves with a stalled economic recovery, a cloudy outlook for air travel, and 40 percent higher (and record) energy costs. Those realities cannot be ignored. While we may not be able to grow immediately, our strategic initiatives serve to cushion us from even worse economic times, as compared to where we would be without them.
Moving forward, I would ask that everyone take a deep breath and remain calm as we work through next steps. I would ask you to avoid rumors and focus on factual communications, and as always, continue your excellence, your professionalism, and your respectfulness. Finally, thank you again for all that you do for our Company and our Customers each and every day.
Fly Safe!
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