Kelly: “I’m hopeful that pilots will ratify contract”


AUSTIN — The head of Dallas-based Southwest Airlines held out hope Friday that its pilots will ratify a new contract, while warning that the airline industry is still grappling with hard times.

Gary Kelly, Southwest’s chairman, president and CEO, also expressed opposition to federal legislation mandating a proposed passengers’ bill of rights but said airlines may need to voluntarily do more to aid passengers “imprisoned” by hours-long delays on the tarmac. Kelly was the keynote speaker at the Austin Economic Club.

On Thursday, the board of the Southwest Airlines Pilots Association unanimously voted to send a new tentative agreement to its 5,900 members for a ratification vote from Oct. 2 through Nov. 1. Pilots narrowly rejected a previous tentative agreement in June.

“It’ll be up to the pilots and, obviously, I’m hopeful that they will ratify the contract,” Kelly told reporters after his speech.

The new five-year agreement contains three 2 percent raises and two raises based on profitability. It also includes an increase in the company’s 401(k) match and restricts how much Southwest’s capacity can be used for its codeshare partners, Canada’s WestJet and Mexico’s Volaris.

Neal Hanks, the union’s communications director, said union leaders polled members after the June vote in an attempt to make improvements.

“They’ll just have to look at the contract language when it’s available to them and make a decision on [whether] this will meet their needs,” he said.

Kelly said Southwest, the nation’s leading low-fare carrier, is weathering the nation’s economic downturn better than many of its struggling competitors but still faces uncertainty in what he called “the worst recession we have ever seen.”

“The good news is we’re outperforming our peer group, but the bad news is it’s still a very difficult economy,” he said, citing rising and unpredictable fuel prices as one of the industry’s biggest concerns.

Addressing the passenger rights legislation, Kelly, whose company has not been among those blamed for excessive ground delays, said airlines need to make sure passengers have water and food and are comfortable. But he said the legislation would take decision-making away from the airlines, who he said closely monitor long delays.

“The worst thing to do is cancel the flight,” said Kelly. “Our view is to get the customer to where they want to go that day.”