In order to facilitate movement in contract negotiations, the Southwest Airlines Pilots’ Association (SWAPA) today officially filed for mediation with the National Mediation Board (NMB), the federal agency that oversees contract negotiations in the airline industry. After two-plus years of negotiations both sides are currently too far apart to realistically expect an agreement outside of a mediated process.
“This is certainly not a step either side wants to take during negotiations, and certainly not a typical step in the pilot and management relationship at Southwest Airlines,” said Mark Richardson, SWAPA President. “But times have certainly changed.”
SWAPA has focused their negotiations on improvements in areas that address the airline’s flat fleet growth, stagnant career advancement, and compensation. Over the past four years the pilots have sacrificed when asked by the Company. This facilitated Southwest reaching their financial goals, including a stated goal of 15 percent ROIC. Those goals have been accomplished, and furthered, with an announced ROIC total of 19 percent for the trailing 12 months, and a Wall Street expected 21 percent ROIC for fiscal year 2014. Southwest Airlines is on pace to enjoy almost $2.5 billion in operating profit for 2014.
“Our asks continue to be reasonable so that our highly productive pilots can enjoy marginal improvements in their schedule, pay, and especially retirement – an area where Southwest pilots lag significantly compared to our peers at other airlines,” continued Richardson. “Filing for mediation is the next step in the process toward a new contract. We are trying to avoid the destructive and combative relationships that have plagued our industry.”