'Never Say Never' on Bag Fees: Southwest CEO

[weasel_lips]

Facing ever-increasing competition, Southwest Airlines could change its policy of not charging baggage fees at some point, CEO Gary Kelly said on CNBC Thursday, right after the company reported better-than-expected earnings.

"There are no plans to charge for bags in 2013," he said in a "Squawk Box" interview, but added, "Never say never ... the customers will tell us whether they would prefer to have extra fees or whether they would prefer to have everything bundled."

Kelly added that the industry is facing pressure due to higher fuel costs, which weighed on fourth-quarter profits. Southwest did earn $0.09 a share, excluding one-time items, a penny higher than estimates. Revenue of $4.2 billion was just shy expectations. It also saw higher operating expenses and a decline in passenger traffic.

The industry landscape is changing and that's a challenge, Kelly said. "Over the last 10 years … you do have low-cost carriers entering the market."

"Every single legacy carrier has gone through bankruptcy. Gotten their costs down significantly," he said.

Kelly also said the industry is not growing. "The capacity in 2012 was actually down again. And that's what I would expect the [domestic] industry to do … here again in 2013."

—By CNBC's Matthew J. Belvedere; Follow him on Twitter @Matt_SquawkCNBC

http://www.cnbc.com/id/100403693?__source=yahoo|headline|quote|text|&par=yahoo

 

[Flopgut]

"Never say never"? Great! Drop the commercials SWA

 

[Flying Illini]

"Every single legacy carrier has gone through bankruptcy. Gotten their costs down significantly," he said.

Let's highlight the most important quote from that whole article. What he is referencing has nothing to do with bag fees and a heckuva lot to do with flight crew compensation.

 

[Furloughed80]

GL picked the wrong month to stop "talking smack."

 

[fletch717]

Let's highlight the most important quote from that whole article. What he is referencing has nothing to do with bag fees and a heckuva lot to do with flight crew compensation.

Actually it's Rampers,customer service/ops agents and flight attendants that they are going to have to get in line with the rest of the industry. When they finally address this it might lead to a strike. The Rampers will not go along with the kind of pay cut its going to take to bring them in line with the rest of the industry.

 

[humveedriver]

I googled SWA ramp pay and found this shared by a SWA ramper on another forum. I wonder if the unions will band together or point the finger at each other when management comes for concessions;


You'll be getting 40 hours base from day one.. There is the occasional mandatory overtime, and that's always doubletime. Overtime works like this. Working voluntary overtime on first off day is time and a half. Working overtime on scheduled work day is time and a half for first 4 hours and double time for all hours after that. That's really the secret to why Southwest ramp agents make so much money. $26 x 1.5 = $39 an hour. $39 x 4 = $156. $26 x 2 = $52 an hour. $52 x 4 = $208. $208 + $156 = $364. That's $364 extra dollars for working that one extra shift per week. That's $728 extra per pay period. That's $1,456 extra per month. That's $17,472 extra per year. I make $54,163 base per year. With that 1 extra shift I now make $71,635 a year. I work with guys who do 2-3 double shifts per week and their pay is well into 6 figures.

$11.12 an hour works out to be $23,165 base. With the 1 overtime shift using the same math you'll make $30,605.

The good part about this job is that despite the low pay at the beginning, if you can stick it out for a few years high pay is a sure thing. The job security is bullet proof. If you make it out of probation and become a card carrying union member you KNOW for sure based on the scale how much you'll be making in "x" amount of years. The union contract is renegotiated every 3-5 years and the pay is always adjusted for cost of living. The last negotiation took the top pay from $24 an hour to $26 an hour. And historically it's always been similar. It's a safe bet that the pay will be over $30 an hour by the time a new hire today reaches top out.

Here is the complete union contract for Southwest Airline ramp agents.
http://twu555.org/uploads/2008-2011 CBA.pdf

 

[redflyer65]

I've heard rumor of the guys abusing the double time. One guy agrees to call in sick one day so his buddy gets double time. Then he calls in the next day, etc. Rinse and repeat for a nice big check. Just one example things that need to change. There are plenty of other 'non-pilot' examples.

 

[Flyer1015]

The job security is bullet proof.

No job in the aviation industry is ever bullet proof. Todays kings can be tomorrows paupers, and vice versa.

 

[fletch717]

I've heard rumor of the guys abusing the double time. One guy agrees to call in sick one day so his buddy gets double time. Then he calls in the next day, etc. Rinse and repeat for a nice big check. Just one example things that need to change. There are plenty of other 'non-pilot' examples.

Exactly, there are many abusers of this policy, I've heard that up to 30 percent of Rampers made over 60,000 last year. Just look at the longevity of ramp and ops.

 

[livin'thesim]

In unrelated news, an anonymous job posting for "decal-removal" specialists just got posted in the Dallas area.