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Southwest Pilots Fire Back at Company's Push to Cut Pay

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The union representing pilots at Southwest Airlines (NYSE:LUV) is pledging to fight a plan by the airline to cut pay by 10%, setting up a showdown with management as the airline tries to cut costs and outlast the COVID-19 pandemic. Southwest and other airlines are coping with a pandemic-induced slump in travel demand and subsequent decline in revenue. The airline so far has been able to avoid furloughs thanks to a combination of federal assistance provided under the CARES Act and workers taking… (www.fool.com) Más...

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WhiteKnight77
WhiteKnight77 9
Will the pilots "cut off their nose to spite their face" is the real question. With the CEO taking a pay cut, as in no paycheck, even if he will still make money in other ways, should tell the rest of the company that they should be willing to do what is necessary so no one is laid off.
paulgilpin1953
paul gilpin 5
it not just pilots.
unions have a spite mentality in general.
city water dep'ts are a good example. not suitable for an aviation blog, butt a good example.
WhiteKnight77
WhiteKnight77 11
Unions have their place in some instances, but there are union members that I have interacted with that I believe needs to have a reality check. I often here people saying that those who do not belong to a union should not be able to work. That they think people who do not belong to a union (and I know of no NDT/welding inspection unions) do not have a right to work. KMA, everyone has the right to work and enjoy the benefits of doing so, without having to pay for such a "right" to meet union demands.
devsfan
ken young 1
I've read the same nonsense uttered by some unionist workers who have been programmed by a 1950's 'us vs them unions are my religion' mentality. When presented with the fact there is a good reason why just 7% of the private sector labor force is unionized, their knee jerk response is "you're a scab"....Or, 'you just hate the woikin( sic) man'.....I dismiss them with...."see the Priest on your way out. He'll punch your ticket for you"...
devsfan
ken young 2
The decision by the company CEO is but a mere symbolic gesture.
A noble one , but with a $23b market cap,small amount.
But, it signals a roll up ones sleeves and come in for the big win.
This is what a good boss does.
Says to his employees, "I'm not going to ask my employees to do something I would not do myself".
doh
Brian De Jong 1
CEOs do not take pay cuts. He is deferring compensation. Once this is over, he’ll be rewarded tenfold with bonuses and stock options etc. Pay cuts for pilots, on the other hand, will be permanent and they will take a decade to renegotiate the restoration of their sacrifice. In other words, the pilots will have lost 10% permanently. It has happened over and over and over in this industry, and yet there are still tools who advocate for the same suckers game every time. Disappointing.
iflyrjs
10% cut is better than 100%
bentwing60
bentwing60 24
So, a senior SWA captain would rather see his low seniority seat mate layed off than sacrifice 10% of what is one of the better 'apples' for even the least adept line bid folks! They have truly joined the modern "I got mine" American way and not the old SWA "Spirit".
saso792
saso792 13
That is exactly what the senior American Airlines captains did to their low seniority seat mates. Hopefully karma will find them sooner rather than later.
emkostiuk
emkostiuk 17
Yep, I agree during a world wide crisis it's time to step up to the plate and bunt helping the TEAM rather than show boat a homerun and possibly lose the series.
RECOR10
RECOR10 3
Simple....fire them, screw the union and let the lawyers take
the the money. That is the American way....buy, yes, fire them.
esu589
Joseph Sede 4
Spoken like a true Reganite
devsfan
ken young -1
That's just nonsense.
Straw man argument
bobkamman
Bob Kamman 1
I think you missed the part that said, "there's no guarantee that furloughs will be avoided even with that cut." It will be interesting to see Southwest's load factor and revenue ppm for last quarter. They are keeping far more of their planes in the air than some of their competitors -- like, they didn't quite judge how long this pandemic would last. Should the pilots pay for the fuel that was burned by empty planes?
bentwing60
bentwing60 4
I missed nothing! In case you have missed all of the current commercials, PSA's, and claims from the 'gilded' cages that "We are all in this together", this reeks of 'no we are not'!
bobkamman
Bob Kamman -1
LUV has a market cap of about $23 billion. If it's like most companies, 30% of that is in foreign hands, including Chinese billionaires and Russian oligarchs. Another 50% is owned by the top 1% of Americans by wealth. So how much is 10% of pilot salary, and should the people who fly the planes give it up so that the investors won't suffer? When it comes to figuring out who's in this and who's not, it's the owners of the company who prefer that the employees take the hit.
RECOR10
RECOR10 4
My, and my staff's retirement plans think you are not so aware of the realities of the markets.
devsfan
ken young 1
What do Chinese and Russians have to do with anything?
Your post dates back to an archaic notion held by unionists and union supporters, "when all else fails, blame the foreigners".
Followed by the no foreign investment protectionist rhetoric
sparkie624
sparkie624 10
Not too smart.... Guess they cannot see beyond their noses!
rartac
Robert Artac 4
congratulations. You're a legacy carrier with all the drama and snark of legacy carrier pilots. Good luck. Herb isn't happy.
phowry
Phil Howry 3
For those familiar with the "David and Goliath" type story of Southwestern Airlines ("SWA"), you understand that ("SWA") didn't destroy "Goliath" (i.e., legacy carriers); they merely reduced his nutrition (i.e., revenue stream) thereby weakening and diminishing his dominance. Then as ("SWA") began standing tall on the industry's competitive battlefield, they began following the same bloated administrative business bureaucracy growth that made "Goliath" susceptible to revenue stream attacks.

Pilots, Flight Attendants, ticket/gate agents, baggage handlers, schedulers etc., etc. (i.e. essential employees), are what made ("SWA") a customer preferred airline. Given the current abnormal industry environment, if ("SWA") reduced the number of Vice Presidents, Union operatives and other non-essential (i.e, non-customer-related) fixed-cost administrative bureaucracy, then and only then, should a "Pay Cut" for essential employees be placed on the table.

If ("SWA") made such a decision the "essential workers" would view this as an acknowledgement of their "company dedication"; thereby, inherently reducing the desire and/or need of parasitic fixed-cost admin. expenses such as Union operatives, bloated Employee Relations Departments, etc., etc.
devsfan
ken young 1
I'll condense this.
"It's Management's fault".
Correct?
KennyFlys
Ken Lane 2
When the conservative values the airline were built on have all passed on, what's left to lead and influence the continuation of those values?
phowry
Phil Howry 1
Your assumption is "the conservative values" (i.e., Herb Kelleher's values) remain to be passed on. My point is, had the original "conservative values" been in place, there would be no pay cut confrontation between essential employees and parasitic management.

An industry's market vulnerability usually originates with out-of-touch/balance management values versus employee values. In a customer relations-based industry, management should be process promoted up through the ranks. How many retired pilots, flight attendant and/or baggage handlers are sitting in the ("SWA") headquarters "management positions"?
KennyFlys
Ken Lane 1
You have a point, to an extent. There should be a mixture of business management and those who rose to the ranks.

I think part of the issue with USPS is it has always promoted from within. There was never fresh blood. So, if you have only those former positions now handling the corporate management, there is a clouded judgment on what needs to happen in order for a going concern to financially survive.
phowry
Phil Howry 3
The USPS and a for-profit competitive business enterprise (i.e., ("SWA"), in not a qualified comparison.

Regardless, my original point deals with management's quality versus quantity. ("SWA") essential employee roster is regulated by direct payroll budget expense/benefit ratio limits. When management payroll expansion ignores direct expense/benefit ratio limits, an out-of-balance/touch situation occurs. There is no limit to how little people can do; a plausible USPS analysis.
devsfan
ken young 1
Lets not get into the USPS....Too many people nostalgic about "the Mail"....
KennyFlys
Ken Lane 1
I think we're on the same track.

Legacy carriers put themselves in dire straits with so many bankruptcies and/or failures requiring a buyout because they never learned to operate in a post-regulation atmosphere. They kept doing the same thing and got the same result... losses. It didn't help that unions kept expecting wages that were more in line with what could be afforded in those old days.

Now, rates are less, competition is tighter and unions still expect a lot. And, management has to manage by applying the numbers and not emotion.
phowry
Phil Howry 2
I believe you are spot on. When interested parties "pull the wagon" in the same direction business enterprises, organizations and even marriages prosper.

All for one and one for all is still a viable motto referencing loyalty; if you don't stand for something, you'll fall for anything.
devsfan
ken young 1
The average coach fare is actually about the same as it was 35 years ago. Using the bls.gov CPI inflation calculator I will show this....
EWR to CLT to EWR....Coach fare was around $200 in the mid 80's.....In 2020 dollars thats $493.20. Checking fares on a few travel sites, the average mid week coach fare without fees( baggage seat upgrades ) is $232 plus taxes and fees....Around $260. That's about 60% of the the 1985 fare. Air carriers have to buck up and let the traveling public know that the gravy train just made its last stop. Carriers have to start charging realistic fares.
bigkahuna400
bigkahuna400 3
I am not worried about them..Delta just announced a $5B charge for the quarter, but also stated they had some $21B in cash on hand....No worries there or at Southwest.
yr2012
matt jensen 1
LUV hedged it's fuel supply for a decade or more
sparkie624
sparkie624 1
That was a Big gain for them.... One of the few smart things they ever did.
devsfan
ken young 0
And thus was unaffected by the fuel price spikes of the late 2000s.
What's your point?
watkinssusan
these are very trying times for al of the airlines,and also very different circumstances than they have encountered before..even with pending strikes by unions, or the awful circumstances of 9/11,airlines have bounced back because passengers came back rather quickly..covid 19 is such a scary unknown to everyone,that people are NOT as of yet,flocking back to take vacations or go on that business trip,and even the holiday season seems very uncertain..these pilots should be happy to take a pay cut in order to keep the company in business, and help out their fellow employees..it has been done before by other airlines and proved successful..southwest employees are just not used to the real up and down financial situations as they have managed to stay profitable,have had good management,and not needed to do layoff or furloughs nor offer "early out" packages...
devsfan
ken young 3
Agreed.
Consumer based customer service industries are most affected by Covid 19.
These pilots and their union are facing this reality.
Their response is short sighted.
Someone should tell them "people, 90% of a loaf is better than no loaf"
av8bdriver
Greg York 5
If you don't work at Southwest, especially if you don't fly for SWA, you can't possibly understand the intricacies involved here. I do all of the above. Bottom line, trust me when I say that the pilots care deeply about the most junior pilot here and want to do everything we can to save them. I will leave it at that. We luv our customers and tremendously appreciate all you you. These are tough times for all of us. Let's all work together and try to avoid being tribal towards each other.
DonDuckworth
Don Duckworth 2
These are not normal times. Many businesses are failing through no fault of their own. If this causes Layoffs won’t the junior pilots be affected the most?
av8bdriver
Greg York 1
poreagan
Good words and tough times for all. Remember just because some companies have their workers traveling again doesn't mean that the PAXs haven't had pay cuts in order to retain their jobs. If I'm reading this correctly the request is to expand the discussion of available options.
av8bdriver
Greg York 1
Correct
devsfan
ken young 0
I understand that it is rarely the rank and file members that make these decisions. Usually, it is the union management that issues the statements and sets policy.
Now, do I believe anyone should be compelled to take a pay cut? No.
I do believe though, that for the overall well being of the company, it may be wise to "get your hair cut".
av8bdriver
Greg York 1
SWAPA, our union, is better than they have ever been IMO. We strongly stand with our board and they definitely speak for most of the group. It may be wise to hold opinions unless you have all of the facts.
devsfan
ken young 1
and the facts ARE?...what's the use in posting "until you have all the facts" if you're not going to post all the facts? You've leaving us with no alternative but to continue speculating. So, may we have "all the facts" please?
Mmeyers7167
They need to “take one for the team.”
tlillis4
This is the same pas-de-deux whenever a unionized workforce is asked for give backs. The reply is it’s an OUTRAGE, an attempt to bring labor back to the 19th century and the ghost of Samuel Gompers is invoked. The initial counter is always something that won’t save enough money (the early retirements) or something the union knows isn’t in management’s gift (promising no furloughs).

I fully expect that the final agreement will be cuts less than 10% combined with retirement “buy outs” in exchange for a court-enforceable “snap back” on pay based on passenger numbers not revenue.
saltyjacks
LUV was bailed out by the Cares Act and it pilots were paid their full salary for 6 months whether they flew or not. Flying only 30 to 40 percent of your schedule means a large percentage of the pilots did basically nothing. This time it it your turn to make some sacrifices to save your company and preserve your job. There are currently 20 million Americans that are unemployed who love to give back 10 percent of their paycheck to stay employed.
saltyjacks
av8bdriver
Greg York 1
Reagan, your facts are a bit flawed. We are not salaried. We get paid by the hour. A very small number of the most senior pilots fit your statement above. Yes our flying was reduced. But most people flew 75-100% of their respective schedules. Please see below for my previous comments on this matter. The title of this article is misleading. "Fire back" is using sensationalism to garner emotion... unfortunately it's the wrong emotion. We need to work together.
gairforce
Gary Ondrey 1
Typical selfish pilots...it's all about....me....me....me. Man up and do what's right or a lot of you won't have jobs. Try finding another one in this environment
av8bdriver
Greg York 1
Gary, what is your beef with pilots. Why do you stereotype them? It took me 26 years of training to qualify to be an airline pilot. That’s over a quarter of a lifetime. Can you do that math?
KennyFlys
Ken Lane 2
A good many of his other comments are similar in attitude.

It's an unusual name and he claims to have an ATP so I looked it up. I'm having a hard time reconciling the two records being the same guy.


A/B-727, A/B-757, A/B-767, A/B-777, A/CE-500, A/CL-600, A/CL-604, A/G-IV, A/HS-125, A/LR-60, A/LR-JET


Or, it's a fake name.


How 'bout it, Walter?
empena325
Edward Pena 1
For the other SWA employees, the company made sure to add the fact that if concessions were made, then jobs are safe until 2022. I can't imagine the company "forgetting" to add the same clause to the pilot's proposal.
devsfan
ken young 1
Failing the development of a vaccine and/or a relatively low percentage of people willing to take a vaccine, Covid 19 is going to be in the population.
No air carrier can predict load factors with any real accuracy. Therefore, to include any job protection guarantees would be impossible.
In this pandemic, with the so called science being bounced about like a political football, everyone has to be prepared to make sacrifices.
Jonathantack
Jonathan Tack 1
it should just be good sense to know those who work the most deserve the most compensation, and those who work less (either by choice or by a slump of demand) should deserve and expect a lower compensation. "him to whom much is given, much is expected"
CAH747
EAL was killed when union & manag't locked horns. Lorenzo played games with the pilots and they lost. Talk Talk & do it again.. Work it out. That's how your airline was built. I was Pan Am
devsfan
ken young 1
Eastern Airlines was placed on its death bed the moment Frank Lorenzo bought controlling interest in the company. This was the days of the leveraged buyout. Lorenzo had one goal. Cut costs by hammering unions into submission. The idea was to make the company more profitable by slashing costs which would make the breakup value higher. Lorenzo made a killing while the carrier was killed on the operating table.
Carl Icahn essentially di the same thing to TWA. He bought a controlling interest in the company, stripped it of its most valued assets, sold those off at a significant profit, then bankrupted the carrier into a merger( was gobbled up) with American Airlines.
ABusDrvr
ABusDrvr 1
Interesting how management always look for give-backs when times are tough, yet never unilaterally offer pay increases when times are flush. "We have a contract," is the familiar refrain. SWA management will furlough if they need to. They have too many pilots for their current operational needs. It's as simple as that.
devsfan
ken young 1
I order to understand the process, one must be privy to the text contained in the four corners of the agreement.
KennyFlys
Ken Lane 0
It seems to me the target for all the anger that has cost industry across the spectrum so much business should be the Democrats and liberty-hating RINOs who locked down the nation with ignorance and panic.
LarryQB
LarryQB 0
In normal times a slight giveback or some furloughs is to be expected. These aren’t normal times. Bearing in mind I’m told that senior United Captains make about $36K/month (yes, per month), the top 1/3 took a 10% pay cut, the middle third a 20% cut, and the bottom third a 50% cut it would seem greed is rampant. Now setting aside for a moment the matter of whether masks help, the vast majority of the public thinks they do. Since the White House has prohibited the DOT/FAA from requiring masks the public is leery of flying. Yes, the airlines themselves require them but that’s less sure than a government mandate. The end result is an industry in trouble because of high pay and lack of passengers. The temporary fix will be a bailout from your taxes.
devsfan
ken young 2
A federal mask mandate would be illegal
Washington is staying away from issuing what would certainly be viewed as overbearing regulations.
Anyway, this and issue of regulations or which entity mandates them. All carriers require them.
It appears you posted your theory simply to take a swipe at the administration.
Dismissed
KennyFlys
Ken Lane 1
The Democraps in the House would rather give away tax money that later gets repaid than ever give tax breaks on existing income they'll never see again.

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