Academic journal article Monthly Labor Review

Southwest Airlines Agreement

Academic journal article Monthly Labor Review

Southwest Airlines Agreement

Article excerpt

Southwest Airlines and the Southwest Pilots Association reached an innovative 10-year agreement after 7 months of negotiations. That contract links pilots' financial rewards to the economic success of the company and allows the union to cancel the pact after the first 5 years. The settlement also provides improved medical and retirement benefits to the 2,000 pilots in the bargaining unit.

Southwest Airlines, the industry's leading low-cost, low-fare airline, praised the pilots' willingness to tie wage increases to the company's financial performance as a sign of commitment and faith. Herbert D. Kelleher, the chief executive officer of Southwest, called the agreement "a bold statement by our pilots that they stand ready to lead Southwest Airlines into the next century as the low-cost leader of the airline industry." Union president Gary Kerans cited the pact as "a positive example of good-faith bargaining in which the pilots were able to meet their members' and families' needs, solve collectively unique problems, and prepare for our future together."

In lieu of traditional wage increases during the first 5 years, pilots will receive bonus payments in 1995, 1997, and 1999 based upon the carrier's profitability. …

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