Labor Concessions at SWA?

[SuperFLUF]

Labor Concessions at SWA?
Southwest CEO: Company Feels Pressure On Labor Costs -FT

DOW JONES NEWSWIRES</FONT>
March 21, 2005 3:33 p.m.

NEW YORK -- Cuts in labor costs at rival carriers have put pressure on Southwest Airlines Co. (LUV) to keep down its own compensation costs, the company's chief executive said in an interview published Monday.

"I can't promise you we won't ever have to seek labor concessions," Southwest CEO Gary Kelly told the Financial Times, which noted that salary levels at UAL Corp.'s (UALAQ) United Airlines would soon be lower than at Southwest.

"Do we want labor concessions? Absolutely not," Kelly told the FT. "But the way to afford the compensation package is by improving productivity and avoiding future hiring. As long as we can accomplish that, I think we can avoid concessions."

The Dallas low-fare carrier recently said that it will add new nonstop service between Chicago's Midway International Airport and Austin, Texas; New Orleans; Tucson, Ariz.; Sacramento, Calif.; and Buffalo and Albany, N.Y.

 

[roughneck]

I seriously doubt the company would ever ask us for concessions. (never say never, but the competition is still light years behind in productivity and costs)I do feel however, that the company will be asking us for work rule changes that will help make us more productive and save money on the bottom line. It is my feeling that the general concensus among the pilot group is that we will give the company more productivity to strengthen the bottom line and help pad our profit sharing wallets.

Some of our scheduling rules cause us to be less productive than we would like to be sometimes. I think those issues will be worked out during the next year or so. With the possiblity of a Section 6 opening as early as Sept. I think the company and the union are looking for ways to meet in the middle of those issues.

I don't think the company will ask us for any money. We will probably gain some QOL in exchange for productivity.

 

[mach none]

So now it starts with Southwest too. Good luck.

 

[Big Beer Belly]

Labor Concessions at SWA?
Southwest CEO: Company Feels Pressure On Labor Costs -FT

DOW JONES NEWSWIRES</FONT>
March 21, 2005 3:33 p.m.

NEW YORK -- Cuts in labor costs at rival carriers have put pressure on Southwest Airlines Co. (LUV) to keep down its own compensation costs, the company's chief executive said in an interview published Monday.

"I can't promise you we won't ever have to seek labor concessions," Southwest CEO Gary Kelly told the Financial Times, which noted that salary levels at UAL Corp.'s (UALAQ) United Airlines would soon be lower than at Southwest.

"Do we want labor concessions? Absolutely not," Kelly told the FT. "But the way to afford the compensation package is by improving productivity and avoiding future hiring. As long as we can accomplish that, I think we can avoid concessions."

The Dallas low-fare carrier recently said that it will add new nonstop service between Chicago's Midway International Airport and Austin, Texas; New Orleans; Tucson, Ariz.; Sacramento, Calif.; and Buffalo and Albany, N.Y.

When the king of low costs floats the trial balloon of labor concessions you can be assured that:

1. This industry (seat capacity/demand) is completely out of whack.

2. They have a definite concession target and plan in mind.


I find this news immensely distressing for our profession. When the CEO of the company with the smartest business plan, lowest costs, most highly motivated workforce essentially says it questions its continued ability to compete and make a profit in this business ... and now looks to wage cuts to help buoy the bottom line ... we are all in trouble.

It appears SWA's competitor's have all squandered their labor cuts by further reducing ticket prices. CAL is the latest to rescind their own fare hike while their 4 unions vote on wage cuts ... anyone else choke on the irony of this?

 

[SuperFLUF]

..........CAL is the latest to rescind their own fare hike while their 4 unions vote on wage cuts ... anyone else choke on the irony of this?

That's not all of the story. DELTA recinded the fare hike and CAL then matched DELTA's pullback. DELTA has since reinstated the fare hike and CAL will most likely do the same

Southwest is looking at the end of their hedges on the horizon and are being smart by not waiting until then to come up with a plan or hoping they fuel costs will abate. They obviously have some superstar oil experts on their team.
I would be quite surprised if SWAPA and managment are not able to come up with a compromise that might even increase the pilot compensation in some way while keeping the cost structure managable.

 

[mach zero]

That's not all of the story. DELTA recinded the fare hike and CAL then matched DELTA's pullback. DELTA has since reinstated the fare hike and CAL will most likely do the same

Southwest is looking at the end of their hedges on the horizon and are being smart by not waiting until then to come up with a plan or hoping they fuel costs will abate. They obviously have some superstar oil experts on their team.
I would be quite surprised if SWAPA and managment are not able to come up with a compromise that might even increase the pilot compensation in some way while keeping the cost structure managable.

Fuel hedging is an ongoing process at SWA. It is not like we made one big hedge a couple of years ago and have been operating off that since. I will spare you the explanation because it was covered indepth on other threads. What Gary Kelly said is not new news. He told us the same thing at our breakfast in October of last year. It costs a lot of money to hire a pilot. He would rather have his current pilots be highly productive than hire more to sit around on reserve. What he was asking for is everyone to fly one extra day a month. He is not "floating the trial balloon of labor concessions."

 

[Big Beer Belly]

What he was asking for is everyone to fly one extra day a month. He is not "floating the trial balloon of labor concessions."

Isn't working more hours for the same pay a "labor concession"? Some would even argue more hours at the same pay is effectively a pay "cut", or at least a reduction in the "rate" of pay.

As far as the "trial balloon" ... I was unaware Kelly's been successful in getting the SWA pilots to work more for the same pay. If so, there's nothing "trial" about that balloon ... you've already taken a concession. Can't see how it could be interpreted any differently.

BBB

 

[Chest Rockwell]

BBB,

I don't know if you know how airline pay works, but if you work an extra hour, day, or week, you get paid for that extra time. We are not asked to work an extra day for the same salary/take home. You work extra, you get paid extra, more goes into your 401(k) and profitsharing.

 

[cactuspilot]

It's not the same pay if you work more. The more you fly, the more you get paid. Whata concept!!

However, it saves SWA tons of $ money even though they are paying you more.

Healthcare, Training, just to name a couple...

 

[Le Pilote]

SuperFLUF is just trying to justify his decision to cave in the CAL concession vote by saying, "Look, SWA is giving up too!"

A plus,

Le Pilote