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sccutler
Topic Author
Posts: 5843
Joined: Thu Jan 27, 2000 12:16 pm

Southwest Offers Package For Senior Staff

Wed Jul 18, 2007 4:17 am

Southwest is taking proactive measures to continue cost-control...

Fair-use excerpt:

Southwest Airlines Co., a low-cost airline which has one of the best-paid work forces, has offered buyout packages to 8,700 operations employees in hopes of enticing some early departures.

The packages were sent the eligible employees Monday, Southwest spokeswoman Beth Harbin said, with replies required by Aug. 10.

The offers were sent to higher-paid employees who work as flight attendants and those who work in customer service, the airport ramp, provisioning, operations, freight and reservations, including supervisors.



http://www.dallasnews.com/sharedcont...7dnbussouthwestbuyouts.f495e1.html

Of particular interest to me, was language in the article as posted, then IMMEDIATELY withdrawn, which stated that Southwest was also planning on changing its seating policies and frequent-flier program.

Any insiders want to dish?
...three miles from BRONS, clear for the ILS one five approach...
 
KarlB737
Posts: 2922
Joined: Sat Mar 20, 2004 9:51 pm

RE: Southwest Offers Package For Senior Staff

Wed Jul 18, 2007 4:23 am

Essentially Southwest Airlines management notified employees Monday they may be eligible for a $25,000 parting gift. With salaries, wages and benefits the highest single cost for the carrier, just ahead of rising fuel costs, employees meeting certain criteria will be able to choose by Aug. 10 to go or stay.


Courtesy: Arizona Republic

Southwest Workers Can Choose $25,000 Buyout

http://www.azcentral.com/arizonarepu...rticles/0717biz-southwest0717.html
 
luvfa
Posts: 342
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RE: Southwest Offers Package For Senior Staff

Wed Jul 18, 2007 5:09 am

It is limited to employees who have been her 10+ years. A good way to weed out our more senior/higher paid employees. With the Ramp, Pilots and Flight Attendant contracts up in the next 2 years, a good way to control our Labor Costs.
 
ssides
Posts: 3248
Joined: Fri Feb 09, 2001 12:57 am

RE: Southwest Offers Package For Senior Staff

Wed Jul 18, 2007 5:18 am

It's a shame that Southwest has to do this in order to compete with airlines that have been shielded for years by bankruptcy protection.
"Lose" is not spelled with two o's!!!!
 
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antoniemey
Posts: 1419
Joined: Mon Dec 26, 2005 5:38 pm

RE: Southwest Offers Package For Senior Staff

Wed Jul 18, 2007 5:28 am

Quoting Ssides (Reply 3):
It's a shame that Southwest has to do this in order to compete with airlines that have been shielded for years by bankruptcy protection.

Umm.. Early Retirement packages are a common practice at many companies, including many airlines. It's not so much a matter of NEEDING to do it to compete, but being proactive to keep labor costs down by offering your senior employees a package deal and then either replacing them with new hires or not laying off lower seniority people, depending on the particular company's situation.

CO, for one, has offered several such packages in recent years.
Make something Idiot-proof, and the Universe will make a more inept idiot.
 
ssides
Posts: 3248
Joined: Fri Feb 09, 2001 12:57 am

RE: Southwest Offers Package For Senior Staff

Wed Jul 18, 2007 5:55 am

Quoting Antoniemey (Reply 4):
Umm.. Early Retirement packages are a common practice at many companies, including many airlines. It's not so much a matter of NEEDING to do it to compete, but being proactive to keep labor costs down by offering your senior employees a package deal and then either replacing them with new hires or not laying off lower seniority people, depending on the particular company's situation.

No doubt about that -- but this is only the second time that WN has done this in its history. I seriously doubt they would be taking this step if they weren't dealing with competition from three airlines that should no longer be competing, but are still around with streamlined cost structures due to the overly generous US bankruptcy laws (yes, I'm talking about US, NW and DL).
"Lose" is not spelled with two o's!!!!
 
boeing743
Posts: 338
Joined: Thu Jun 14, 2007 10:16 am

RE: Southwest Offers Package For Senior Staff

Wed Jul 18, 2007 7:17 am

Since they are buyout toward some senority at WN, Are they going to hire some new people to replace them or freeze the hiring for while until they able to manage their money better? I bet image that many of them would be little upset that WN is provide the buyout.
 
m404
Posts: 1875
Joined: Tue Nov 25, 2003 4:43 pm

RE: Southwest Offers Package For Senior Staff

Wed Jul 18, 2007 7:52 am

As far as NW BK protection I understand your position but with this caveat. Most of the pairing down at NW in senior station people was done before BK but definitely within the threat of it. Remember here I'm talking about the usually high seniority at the out stations who were replaced low bid contract workers where immediately this cut the wages to less than half not to mention loss of insurance and benefits. I would love to have seen this offer given to them.

It is very interesting to see the this "race to the bottom" as it's often been called is now effecting the highest paid (?) and best positioned LCC (to stretch that label). This seems inescapable in today's airline wage climate and it's too bad for the industry. The WN offer is certainly better than the Circuit City gutting of experienced personnel and we will all watch how this continues.
Less sarcasm and more thought equal better understanding
 
TropicBird
Posts: 432
Joined: Sat May 28, 2005 9:13 am

RE: Southwest Offers Package For Senior Staff

Wed Jul 18, 2007 8:34 am

Quoting Ssides (Reply 3):
It's a shame that Southwest has to do this in order to compete with airlines that have been shielded for years by bankruptcy protection.

I respectfully disagree....I believe the carriers went into bankruptcy in part because of SWA's pricing practices. The only reason SWA has been able to avoid this situation for so long is because of their fuel hedging advantage which is now beginning to disappear. It is indeed ironic that the restructuring the legacy carriers had to endure (at the expense of many dedicated employees and loyal customers) will now come back to haunt SWA.
 
CruzinAltitude
Posts: 407
Joined: Thu May 06, 2004 5:02 pm

RE: Southwest Offers Package For Senior Staff

Wed Jul 18, 2007 8:48 am

Quoting TropicBird (Reply 8):
I believe the carriers went into bankruptcy in part because of SWA's pricing practices. The only reason SWA has been able to avoid this situation for so long is because of their fuel hedging advantage which is now beginning to disappear. It is indeed ironic that the restructuring the legacy carriers had to endure (at the expense of many dedicated employees and loyal customers) will now come back to haunt SWA.

Very interesting perspective. I do not know that I agree with you, but you make an interesting point.

I am personally inclined to believe that the major airlines just plain got caught in a perfect storm situation. Rising fuel costs, expensive labor which comes to almost all companies that have exsisted for more than a few decades, the success of LCC's and the floor dropping out of the travel industry after 9/11. Not to mention poor management (i.e. UA). Do I think the success of SWA has effected other airlines, yes. Do I think the success of SWA is the main factor in the struggles faced by legacy carriers, not by a long shot.
 
r311music
Posts: 102
Joined: Sun Jul 10, 2005 2:49 am

RE: Southwest Offers Package For Senior Staff

Wed Jul 18, 2007 8:50 am

I hope my seniority goes up at MCO haha. Yea right.
confusing use of time
 
IPFreely
Posts: 2630
Joined: Sun Dec 24, 2006 8:26 am

RE: Southwest Offers Package For Senior Staff

Wed Jul 18, 2007 8:58 am

Quoting Antoniemey (Reply 4):
Umm.. Early Retirement packages are a common practice at many companies, including many airlines. It's not so much a matter of NEEDING to do it to compete, but being proactive to keep labor costs down by offering your senior employees a package deal and then either replacing them with new hires or not laying off lower seniority people, depending on the particular company's situation.

This is exactly correct. This occurs at almost every company from time to time, airline or not. It should also be pointed out that early retirement packages have been OFFERED to eligible employees -- there's nothing mandatory about it. When other companies do this they frequently have a target number of employees they want to lose and if they don't get enough early retirement takers, they use layoffs to reach their target. It doesn't appear that SWA has taken this step.
 
UAL-Fan
Posts: 345
Joined: Thu Dec 09, 1999 1:36 pm

RE: Southwest Offers Package For Senior Staff

Wed Jul 18, 2007 12:24 pm

No one should count SWA out yet. The Airline is run by some VERY savy business people that didn't get this far by not making sound financial decisions. They will make the necessary changes that will allow the airline to thrive and grow.
 
san88
Posts: 115
Joined: Wed Jul 26, 2006 3:30 am

RE: Southwest Offers Package For Senior Staff

Wed Jul 18, 2007 4:52 pm

Quoting Boeing743 (Reply 6):
Are they going to hire some new people to replace them or freeze the hiring for while until they able to manage their money better?

Were hiring as we speak, company makes money off new hires vs. paying senior employees who topped out.
sit on the Captain side when you fly into SAN
 
scouseflyer
Posts: 2193
Joined: Wed Apr 26, 2006 7:02 pm

RE: Southwest Offers Package For Senior Staff

Wed Jul 18, 2007 4:55 pm

Quoting Luvfa (Reply 2):
It is limited to employees who have been her 10+ years. A good way to weed out our more senior/higher paid employees. With the Ramp, Pilots and Flight Attendant contracts up in the next 2 years, a good way to control our Labor Costs.

You make it sound like having experienced employees who can do a better job that a trainee is a bad thing, I know it's all about the bottom line but this is peoples livelehoods that is being talked about here.
 
WDBRR
Posts: 605
Joined: Tue Jan 25, 2005 11:28 am

RE: Southwest Offers Package For Senior Staff

Wed Jul 18, 2007 7:49 pm

Quoting Antoniemey (Reply 4):
Umm.. Early Retirement packages are a common practice at many companies, including many airlines.

My brother was offered $25,000 in 1987 from GM to leave his assembly job.
he accepted that money and put a down payment on a house.
today, $25,000 doesn't seem as enticing as 20 years ago.
 
SPREE34
Posts: 1750
Joined: Tue Jun 29, 2004 6:09 am

RE: Southwest Offers Package For Senior Staff

Thu Jul 19, 2007 12:41 am

Quoting Ssides (Reply 3):
It's a shame that Southwest has to do this in order to compete with airlines that have been shielded for years by bankruptcy protection.

It's a shame any of the solvent airlines have to deal with multiple carriers who scammed the bankruptcy process instead of adapting to the market place.

Quoting TropicBird (Reply 8):
I believe the carriers went into bankruptcy in part because of SWA's pricing practices. The

They went into bankruptcy because of their (management and some employee groups) own inability to adapt to a changing market place. LCCs were/are part of that market place, but they aren't the biggest factor in what has happened.

Quoting UAL-Fan (Reply 12):
No one should count SWA out yet. The Airline is run by some VERY savy business people that didn't get this far by not making sound financial decisions. They will make the necessary changes that will allow the airline to thrive and grow.

Too bad the legacy carriers didn't "make the necessary changes.....to thrive and grow." They have had 29 years to adapt to deregulation.
I don't understand everything I don't know about this.
 
worldtraveler
Posts: 3417
Joined: Tue Aug 05, 2003 6:18 am

RE: Southwest Offers Package For Senior Staff

Thu Jul 19, 2007 6:56 am

Quoting CruzinAltitude (Reply 9):
I am personally inclined to believe that the major airlines just plain got caught in a perfect storm situation. Rising fuel costs, expensive labor which comes to almost all companies that have exsisted for more than a few decades, the success of LCC's and the floor dropping out of the travel industry after 9/11. Not to mention poor management (i.e. UA). Do I think the success of SWA has effected other airlines, yes.

Tropic Bird is dead on. Of course WN isn't solely responsible for the legacy carrier's demise but WN is the oldest , largest, and most successful LFC in the US. The legacy carriers had high labor costs on 9/11 when demand fell apart and because of their financial problems they were not able to hedge fuel prices - but history shows that they started the practice long before WN started - the legacies just didn't have the money to continue the practice post-Katrina.
Yes any company's failure is due to mgmt's inability to adapt to the changing situation. but many network airlines also realized that you can't get the legacy costs out without a trip thru bankruptcy.

Quoting UAL-Fan (Reply 12):
No one should count SWA out yet.

no one is. they just will begin to look like a traditional airline - with periodic layoffs, an increasingly complex product, and profits that are beat by other carriers (DAL today reported a higher operating profit margin that LUV for the 2nd quarter)

Quoting SPREE34 (Reply 16):
Too bad the legacy carriers didn't "make the necessary changes.....to thrive and grow." They have had 29 years to adapt to deregulation.

The network carriers certainly did adapt and their changes in formulae worked until 2001 which proved much more had to be done. The network carriers adapted and are much more competitive... it simply won't be as easy of a road from here on out as WN and other carriers had for the 2001-07 time period. Many network carriers have restructued themselves and have done a very good job.

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