April 14, 2020
Earlier today, AMFA representatives met, via web conference, with Southwest management, at the request of the company, and were presented with presentations entitled: “Proactively Identifying Savings Options.” These presentations focused on concessionary amendments to the existing collective bargaining agreements with AMFA to, as the company phrased it, “potentially implement on October 1, 2020.”
AMFA recognizes the airline industry is facing monumental challenges as a result of the COVID-19 pandemic. The duration of the pandemic is unknown and may even be peaking. The lingering effects of it are even less determined. During today’s meeting, the CARES Act grant money was referred to by Southwest as an “if” as opposed to a “when.” However, reports from the media this afternoon appear to indicate Southwest will accept that crucial payroll support. This is a step in the right direction.
The basic financial situation remains very much, in flux. To date, the company has failed to engage with AMFA to collaboratively discuss cost saving measures, such as viable temporary leave or early out options — choosing instead to act unilaterally with respect to the Emergency Time Off (ETO) program. Meanwhile, we have heard very little regarding reductions in executive compensation. Notably, CEO Gary Kelly has still only reduced his base compensation by 10%; whereas a large majority of competitor CEOs have sacrificed much more of their own compensation during these uncertain times. In fact, the CEO’s of Delta, Alaska and United publicly announced reductions of their base salaries to zero.
In this context, meaningful assessment of the need for labor concessions, let alone concessionary bargaining, is premature.
AMFA explained its position to Southwest today, in detail, in a letter from National Director Bret Oestreich, which can be read by clicking here.