By Ann Keeton Of DOW JONES NEWSWIRES CHICAGO -(Dow Jones)- Amid widespread cost-cutting in the airline industry, union mechanics at Southwest Airlines Co. (LUV) can expect job security and a "modest" raise over the next four years, said Joe Harris, vice president of labor and employee relations at the low-cost carrier.
Negotiators for the airline and the Aircraft Mechanics Fraternal Association on Thursday reached a tentative agreement for a new contract, which still needs to be voted on by rank-and-file workers.
"In this poor economy, and with the uncertainty for airlines, we're pleased to get a compensation increase and job security," said Louie Key, national director for AMFA. He said in an interview Friday that he couldn't discuss details of the contract for "a day or two," until he shares the information with union members.
The agreement is one of many labor contracts being re-negotiated at Southwest and around the airline industry.
"People don't realize this, but we're the most unionized U.S. airline," Harris said. Southwest, the largest passenger carrier in the U.S. market, works with 10 different employee unions.
Things didn't go so smoothly for Southwest ground workers belonging to the Transport Workers Union of America.
Negotiations, which began in January, recently stalled over wages, which the union said haven't kept pace with the rising cost of living. The two sides agreed to reopen discussions with the help of a federal mediator.
Talks at Southwest are especially important this year, because it's the first time that chief executive Gary Kelly has been the top negotiator for management. Under previous leaders, the airline enjoyed strong growth, healthy earnings - in part due to smart fuel-hedging contracts - and good labor relations with its unions.
Now, in turbulent times for the industry, Southwest has a smaller advantage with fuel hedging, and plans for the first time to cut back on some flights, as the weak U.S. economy causes passenger traffic to slow.
Although the airline plans to cut 196 less-popular flights from its January schedule, Harris said Southwest isn't planning forced layoffs. But he said some employees may be working shorter hours in 2009 than they are now. "Gary doesn't want to put it all on the backs of our employees. Our goal is to preserve jobs," he added.
Harris characterized the mechanics contract as "cost neutral" to the company, and said it offered Southwest more flexibility in decision-making, without asking for concessions from the union.
Earlier in the decade, major U.S. airlines substantially cut labor costs, many in bankruptcy court. Labor relations have become strained as employees, who earlier sacrificed wages and benefits, didn't share in the financial success that U.S. airlines' executives enjoyed in 2006 and 2007.
Key said the new AMFA contract will help preserve "the unique culture at Southwest. I've been in negotiations with many different airlines. Southwest truly does believe its employees are an asset - something that mostly gets lip service at other companies."
-By Ann Keeton, Dow Jones Newswires; 312-750-4120; ann.keeton@dowjones.com
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(END) Dow Jones Newswires
December 05, 2008 17:14 ET (22:14 GMT)

Publié le 05 Décembre 2008 Copyright © 2008 Dowjones