Southwest Airlines pilots seek top industry pay with 7-year gain

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DALLAS / Bloomberg

Southwest Airlines Co. pilots are seeking pay raises that would give them the highest compensation in the industry plus a bigger company contribution to retirement savings, according to a contract proposal presented to the carrier.
The pay increases would average 4.1 percent annually for a compound gain of almost 33 percent over seven years under the plan from the Southwest Airlines Pilots Association. The airline’s 7,600 pilots, who have been without a new contract for more than three years, rejected a tentative agreement with 62 percent of the vote in November.
Southwest has worked to hold down labour-cost increases by securing productivity improvements as it negotiates new contracts. The Dallas-based airline, which posted a record adjusted profit of $2.4 billion in 2015, reported an increase of more than 17 percent in spending for wages, salaries and benefits that year. It was the carrier’s largest single cost.
“A contract which allows SWAPA pilots and Southwest to mutually share in the company’s success is our ultimate goal,” the union said in its proposal. The proposed pay increase over the contract term, which runs to 2020, includes an 18 percent “snap up” in pay on the the day it’s ratified covering the period from 2012 through 2015.
The plan offered by the pilots is a “comprehensive proposal, meaning it’s not built onto or a modification of the tentative agreement we did have,” said Bob Hughes, a Southwest spokesman. “It’s like starting all over again, so it’s going to take us some time to review it.”
The 48-page proposal would provide pay of $249.82 per hour of flying time for a Southwest captain with 12 years of service. That would compare with $245.80 at United Continental Holdings Inc. for a pilot with the same seniority in a comparable aircraft, $234.67 at American and $249.69 under a tentative contract rejected by Delta Air Lines Inc. pilots, according to the Southwest union.
A 12-year first officer at Southwest would make $174.87 an hour in 2016 under the proposal, compared with $167.89 at United, $160.28 at American and $170.54 under the rejected Delta agreement.
Pilots at United and American currently have higher compensation rates than their counterparts at Southwest, the union said.
The labor group’s plan also calls for higher company contributions to retirement savings. Under other proposed changes, pilots could contribute to the fund but would not be required to.

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