Southwest Pilots Reject New Contract
05 November 2015 - 10:00AM
Dow Jones News
Southwest Airlines Co.'s pilots voted down a new contract that
would have raised their wages by more than 17%, highlighting
broader labor discord in the industry as employees seek richer
compensation amid record profits.
The Southwest Airlines Pilots' Association on Wednesday said
nearly 62% of its 8,000 members voted against the new four-year
deal, reached after three years of negotiations, with 38% casting
yes votes.
The vote mirrors an even wider rejection of a new contract in
July by Southwest's flight attendants. That same month, Delta Air
Lines Inc. pilots also rejected a new contract.
When airlines are producing record financial results as they are
today, contract negotiations become trickier. In all three of those
cases, the rejected tentative agreements contained hefty raises,
but ultimately the workers weren't satisfied.
"Despite increased compensation and some work-rule improvements,
there were new company allowances in this agreement that our pilots
did not find palatable when compared to the potential gains," said
Capt. Paul Jackson, president of the Southwest pilots union.
The No. 4 U.S. airline by traffic, Southwest will continue
working until it has a contract that meets the needs of the pilots
and the company, said Craig Drew, vice president of flight
operations. Southwest said it expects mediated discussions to
resume next spring under the guidance of the National Mediation
Board.
The aviators' current contract opened for renewal in September
2012, and that pact will stay in place until a new one is reached.
The pilots union leadership in September agreed to put the new
proposal to a ratification vote, but the union board didn't endorse
it.
About 87% of Southwest's 12,000 cabin-crew attendants rejected a
six-year labor agreement that their union had said would maintain
their industry-leading wages, benefits, and work rules. That pact
had opened for renewal more than two years earlier, and
negotiations were difficult because Southwest wanted to hold the
line on its relatively generous labor costs when it was generating
record profits.
A wide majority of Delta's 12,800 pilots also turned down a new
deal even though it contained pay increases and the promise of 60
new airplanes joining Delta's fleet. But the pact contained
concessions, according to some Delta aviators, including a big
potential reduction in the amount of profit-sharing the pilots
would receive and a new sick-leave policy they didn't like. Soon
after the vote, the chairman of the leadership council of the Delta
pilots union resigned.
In coming days, about 9,000 mechanics at United Continental
Holdings Inc. are expected to hold a vote on a six-year tentative
agreement. The tentative deal, which United says is
"industry-leading," would be the first joint contract since the
company was formed five years after a merger. Some mechanics
already are grumbling that the proposed deal isn't good enough.
United and its flight attendants union have been mired in
negotiations since 2012, hoping to reach their first joint labor
contract since the 2010 merger. But those talks have been slow,
despite efforts by the National Mediation Board to bring the
parties along. The board is a federal agency that oversees
bargaining in the airline and railroad industries.
Not all deals get voted down. A majority of the pilots at
regional carrier Republic Airways Holdings Inc. last month approved
a new deal that raised pay and improved work rules. But that group
faced the possibility that Republic would file for bankruptcy
protection if it couldn't solve its pressing pilot hiring and
retention challenges. The new deal, which dramatically boosts
starting pilot pay, is expected to help Republic stem the loss of
pilots to other carriers and revive its recruitment pipeline.
Write to Susan Carey at susan.carey@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 04, 2015 17:45 ET (22:45 GMT)
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