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Exclusive: Southwest pilots to fly more
[SIZE=+1]Deal puts them in air an extra 1½ hours each month
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[SIZE=-1]1111 PM CST on Wednesday, December 7, 2005
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[SIZE=-1]By ERIC TORBENSON / The Dallas Morning News [/SIZE]
Pilots at Southwest Airlines Co., already the most productive in the industry, will be getting even more efficient.
The Dallas-based carrier has struck an agreement with the Southwest Airlines Pilots' Association to have each pilot fly 1 ½ additional hours each month.
That would save Southwest roughly $4 million annually, because the discounter won't need to hire as many pilots as it expands its schedule about 10 percent a year, the union said.
As other carriers seek to improve productivity, the move could enhance Southwest's already considerable advantage.
Carl Kuwitzky, a vice president for the union, said in an interview Wednesday that the union has been improving its partnership with Southwest.
"Our pilots have no problem working hard," he said.
Southwest spokesman Ed Stewart acknowledged the agreement, which has not been publicly announced, but declined to comment further because the carrier typically doesn't discuss its labor relations.
Southwest's labor costs are a key concern on Wall Street.
Among low-cost, low-fare carriers, Southwest spends the most on its employees by most measures.
But Southwest consistently earns profits by watching its non-labor expenses.
In perhaps the best-known example, the carrier has purchased much of its jet fuel in advance, largely sparing its earnings from an unprecedented hike in fuel prices this year.
Southwest also benefits from high productivity. Its pilots had about 67 hours of actual flying time a month before the latest agreement, reached Nov. 6, goes into effect.
The union and airline will test different strategies to get the extra hours from pilots and then consider making permanent changes. Some of the focus will be on how to best use reserve pilots.
Pilots are paid only for the time their planes are in motion, so the industry measures pilot efficiency by how many hours each can log in a month.
Southwest's point-to-point flying helps the efficiency of its 4,700 pilots because the carrier's planes spend proportionately more time in the air than those of competitors.
Envy of others
Traditional network carriers envy Southwest's record.
The average number of hours that pilots at American Airlines Inc. produce per month is in the mid-40s, a function of more pilot-friendly scheduling rules as well as inefficiencies from operating hubs, as opposed to point-to-point service.
Southwest pilots used to average about 70 hours a month a decade ago, the carrier's union officials say.
But as the pilots have gained seniority, they've also earned more vacation time.
The agreement, along with new technology and information sharing initiatives that will help the union and airline manage pilots, should return the figure closer to 70 hours a month over time.
Southwest pilots enjoy the advantage they have over competing airlines and want that edge to continue, Mr. Kuwitzky said.
Southwest pilots – along with nearly all other employees – receive profit sharing from the carrier, so they improve their own earnings when the airline performs well.
The carrier asked the union for the extra productivity, and the two sides came to terms in a side letter separate from their current contract.
The two sides are set to begin formal talks next year on their contract, which can be changed starting Sept. 1.
Under the Railway Labor Act governing the industry, airline contracts never expire but have dates that they can be changed through collective bargaining.
The Southwest deal comes at a time when American pilots are considering their options in terms of improving their productivity.
Productivity gaps
The Allied Pilots Association, representing 12,000 American pilots, is holding meetings with members this month to present research that identifies the productivity gaps between the world's largest carrier and its competitors.
Though the APA board has authorized its negotiating committee to begin dealing with the airline, no talks are under way.
Total pilot costs between American and Southwest aren't that far apart, according to a study conducted by Bain Consulting for the American pilots union.
Among pilots flying Boeing 737s, Southwest pilots are the best-paid in the industry, though they don't get the traditional pension benefits found at American.
Southwest pilots receive a company match to their retirement plans.