Southwest Airlines surprises amid efforts to avoid holiday repeat

There has been no shortage of news that air travelers have been following in 2023.

Southwest Airlines  (LUV) - Get Free Report has now delivered a major action that may potentially offer some stability for the carrier as it navigates the upcoming holiday season that was a major disaster in 2022.

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Southwest confronted a crisis in late December last year. It had experienced a software meltdown that resulted in the cancellations of 60% of its flights in two days.

Passengers were stranded across the U.S. and stories of lost luggage and frustrated travelers were widely reported.

This year, Southwest has promised that nothing like that experience will happen during the holidays. Amid this environment, the carrier and its pilots are talking about a major unexpected deal.

A tentative contract has been approved

The board of directors of the Southwest Airlines Pilots Association (SWAPA) has voted in favor of a tentative arrangement with the carrier, according to a Dec. 20 late afternoon report by Ben Schlappig of One Mile at a Time.

"The new $12 billion contract would run for five years (through December 2028), and provides significant gains in compensation, with incremental pay increases over the next four years," the travel expert wrote. "The deal also includes improvements to work rules and flying schedules, better disability coverage, and increases to retirement benefits."

Schlappig mentions labor struggles at other major airlines and the success they have had progressing on negotiations.

"In the past year, we've seen pilots at Alaska Airlines  (ALK) - Get Free Report, Delta Air Lines  (DAL) - Get Free Report, American Airlines  (AAL) - Get Free Report, and United Airlines  (UAL) - Get Free Report, all ratify new contracts (in that order), The largest remaining carrier where pilots hadn't yet ratified a new contract was Southwest Airlines, and it looks like those negotiations could be over shortly."

Captain Casey Murray, the SWAPA president, explained the new contract and how recent negotiations have affected both crew and passengers at Southwest.

"We know that the last few years have been difficult for our pilots as well as our customers, but we believe that this TA (tentative agreement) rewards our pilots as well as improving reliability for our passengers," he said in a statement.

"Our membership has fought for almost four years to reach an agreement with Southwest Airlines," he continued. "They now have the opportunity to evaluate this deal and cast their vote accordingly."

The next steps

Schlappig explained the timeline and what the pilots are facing in the coming weeks.

"Now it’s up to Southwest's roughly 11,000 pilots to vote on the new contract," he wrote. "Voting will open shortly, and will run through Jan. 22, 2024."

"With this contract, pilots would get an immediate pay increase of $29.15, 4% pay increases in each of 2025, 2026, and 2027, and a 3.25% pay increase in 2028. This translates to roughly 50% pay increases over the course of five years," Schlappig said.

The travel writer then spelled out what he calls the "bottom line," from his perspective.

"Southwest Airlines and the union representing pilots have reached a tentative agreement on a new contract," he summarized. "If approved, the five year contract would be worth $12 billion, and pilots would be looking at a nearly 30% pay increase the first year, and a total of a roughly 50% pay increase over five years."

"Now it’s up to pilots to vote on the new contract, and by late January we should know whether this contract gets approved or not."

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