In aviation, the role of pilots in upholding flight safety and their everyday contribution to airlines’ success can’t be understated. Keeping pilots well-compensated, especially in large airlines, is a strategic investment. It’s in the best interest of carriers to provide competitive compensation packages that par with industry standards to pilots to alleviate labor disputes or other industrial actions. After years of picketing and contentious negotiations, Southwest Airlines finally struck a tentative deal worth $12 billion with its pilots’ union. A few days earlier, the US low-cost giant and SWAPA (Southwest Airlines Pilots Association) reached a more prosperous, preliminary five-year contract agreement with an immediate 29% pay bump upon its ratification. The new labor deal comes seven months after Southwest pilots voted to authorize a strike as a part of contract negotiations at the airline.
Once the SWAPA approves the labor deal, nearly 11,000 Southwest pilots will receive a significant wage hike of 29.5% upon the contract’s signing. This means that a pilot earning $ 100,000 annually will see an immediate increase to $ 129,500. The contract also comes with a 4% raise in compensation in each of the following years, bringing the cumulative salary hike to around 50% throughout the contract. In Addition to a significant pay increase, the contract will include more generous retirement packages and better working conditions.
Southwest Strike
Southwest pilots have been fighting for an improved labor contract for over 3 years after their old contract expired in September 2020. The aviators sought pay raises, job security, predictable work schedules, and a comprehensive pension plan in their new contract. These demands were fueled by the increasing cost of living, the uncertainty brought about by the pandemic, and the desire for a better work-life balance.
The outbreak of the coronavirus pandemic significantly disrupted negotiations for a new labor agreement offering better benefits for pilots. After years of stall negotiations, the Southwest Airlines Pilots Association has been going head to head with the Dallas-based carrier, pressing it for higher wages and better work-life balance. Despite the roaring return of travel demand and airlines’ return to profitability, the negotiations continued to drag on, fueling pilots’ frustrations.
In May 2023, more than 97% of Southwest pilots voted to authorize a strike if negotiators failed to address the failures and pay issues. The strike authorization votes indicate the union’s willingness to take drastic measures to reach favorable terms in a new labor deal. The pilots overwhelmingly supported the possible Southwest strike to gain leverage in their contract negotiations.
The strike authorization only sometimes leads to an actual work stoppage. Federal law mandates that for a strike to occur, talks must break down, and the National Mediation Board must release the union. After the NMB concludes that the forthcoming attempts are a waste of time and releases the SWAPA, there will be a legally mandated 30-day cooling-off period. After the cooling-off period, the pilots can lawfully walk off the job and begin the work action (strike or a management lockout).
Opening of Southwest strike centers
In August, Southwest’s pilot union requested the NMB to be released from federal mediation with the Dallas-based carrier. But, the Board-which had been working with the pilot union and Southwest Airlines-denied the request, sending them back to the bargaining table.
Despite repeated attempts, both parties failed to reach a concrete agreement at the negotiating table. As a result, Southwest pilots took a solid step toward the strike by opening two strike centers-one in Dallas and the other in Baltimore. The move intensified Southwest Pilots’ push for a new contractual agreement and amplified the union’s efforts to move closer to a complete shutdown of all services.
The Southwest pilots warned of the potential to open strike centers in all 11 pilot domiciles throughout the Southwest system and participate in a strike before the year ended, a move that could have significant implications for the airline and its passengers.
Reaching the deal
On December 19, Dallas-based Southwest Airlines struck a $12 billion preliminary labor agreement with its highest-paid work group. This makes it the fourth largest US carrier to reach a multi-year labor deal in principle that is set to give pilots double-digit pay hikes.
Now that Southwest has offered a deal with a 50% cumulative pay hike, it’s up to Southwest pilots to approve or turn down the deal. The $12 billion labor deal will go to a union vote beginning on January 8. If the pilots approve a preliminary deal in a vote, the contract can be ratified as soon as January 22. Once ratified, the new terms will come into effect immediately, providing the pilots with the promised pay increase and other benefits.
The new five-year working agreement is poised to end the Southwest strike and, hence, years of tense negotiations. The new Southwest preliminary labor agreement adds around $12 billion of value to the previous contract and includes better work-life quality improvements.
Overview of Southwest Airlines’ new labor contract
- 12$ billion in cumulative pay increase over the life of the contract, i.e., 5 years
- 29.5% jump in pilots’ wages upon the contract’s ratification, with net pay increase reaching 50% over five years (4% pay hike each in 2025, 2026, and 2027; and 3.25% in 2028)
- ‘Significantly better’ pilot scheduling system
- Better working conditions
- Comprehensive retirement benefits
- Per diem allotments
- Pay protection for fatigued pilots
Once the contractual agreement concludes in December 2028, the aviators will get an annual 2.5% bonus until a new deal is sealed.
Southwest Airlines pilot pay
One of the US’ largest carriers, Southwest, remunerates its pilots based on experience and seniority. The discount airline has a different pay scale for first officers and senior captains. The carrier pays around $216 per flight segment to first-year captains and $245 to 12-plus-year captains.
Once the new contract is ratified, the 12-year captain will make $368.47 hourly by 2028. Similarly, the new first officer will get a handsome paycheck of $135.20 per hour.
New labor contracts by top US carriers
The top three US carriers, Delta Air Lines, American Airlines, and United Airlines, have already sealed multi-billion deals with their respective pilots’ unions. Atlanta-based Delta was the first of the largest US airlines to offer hefty pay raises in its new $7.2 billion contract in December 2022. Texas-based American Airlines soon followed, giving its 15,000+ pilots immediate raises of 21% and a cumulative 46% pay increase over the contract’s duration.
Chicago-based United Airlines was the third carrier to reach the four-year, $10-billion contractual pilot agreement in September 2023. In Addition to significant pay hikes, United pilots secured improvements in working conditions and retirement plans in the new contract.
Delta Air Lines’ labor contract 2023
- 34% cumulative pay increase (18% immediate pay bump, 5% in another year, 4% after 2 years, and an additional 4% after 3 years)
- $ Addition of 7.2 billion in cumulative value over the next four years
American Airlines labor deal 2023
46% cumulative pay increase over four years(21% immediate pay rise, 5% raise next year, followed by 4% in 2025 and 2026, and 3% hike in 2027)
- Better work rules
- Improvements in pilot scheduling
- Vacation and retirement benefits
United Airlines’ four-year pilot agreement
- Addition of over $10 billion in cumulative wage increase throughout the contract
- Cumulative 34.5%-40.2% pay bump over four years
- Vacation improvements
- Sick leave, better work-life balance
- Increase in United’s contribution to pilot pension accounts
About Southwest Airlines
Southwest Airlines is the world’s largest low-cost carrier headquartered in Dallas, Texas. Founded 56 years ago, Southwest has progressed in leaps and bounds to become the template for all successful LCCs in the world. Boasting a fleet size of 815 Boeing 737 series aircraft, the budget carrier rolls out the most takeoff and landings daily of any pilots in the country. Southwest Airlines offers low-cost flights nationwide, spanning 42 states, and has a foothold in 10 additional countries.
Under its distinct business model, Southwest uses a point-to-point system coupled with a rolling hub in its 11 operating bases. The low-cost powerhouse operates scheduled flights to around 121 destinations within the country and beyond in Central America. Southwest customers can easily take wallet-friendly coast-to-coast hops or enjoy cheap holiday tours to Aruba, Bahamas, Belize, Cayman Islands, Costa Rica, Cuba, the Dominican Republic, Jamaica, and Mexico.
Southwest Airlines fleet
Southwest Airlines is an exclusive Boeing 737 operator with a fleet comprising 815 examples of the 737 narrow-body family. As of December 2023, the US low-fare powerhouse maintains a systemwide fleet of 388 B737-700 jets, 207 B737-800 jets, and 220 B 737 Max 8 jets. The airline is set to bolster its fleet by adding 302 Boeing 737 Max 7 jets, the deliveries of which will begin in 2023.
Southwest Airlines relies on its cadre of skilled and experienced pilots to utilize its substantial fleet capacity. Over 11,000 pilots execute the Dallas-based carrier’s flight operations. These pilots recently secured a new deal that recognizes their contributions to the carrier’s success and allows them to progress in their careers.
The new labor agreement seeks to reward pilots, give them a competitive place in the industry, and expand the carrier’s pilot training capacity to optimize the operation of under-utilized aircraft. The Southwest Airlines Pilots Association has sent the tentative agreement to its 10,000+ member pilots for a ratification vote until January 22, 2024.
