Southwest Union Leaders Send Contract to Pilots for Vote

(Bloomberg) -- Leaders of Southwest Airlines Co.’s pilots union agreed to send a tentative contract agreement to its members, clearing the way for a vote on the deal that would boost pay and retirement benefits.

The Southwest Airlines Pilots’ Association board voted 21-2 to authorize balloting, union President Jon Weaks said in an interview Wednesday. The board did not recommend approval or rejection of the contract, which was reached Aug. 29 after talks that stretched over more than four years.

“They wanted the members to decide for themselves,” Weaks said. “The 8,500 Southwest pilots can make up their own minds.”

Southwest, the biggest discounter, wants to secure new contracts with pilots, flight attendants and mechanics in part to reassure investors concerned about rising labor costs. Leaders of the flight attendants union are reviewing their tentative agreement this week while talks continue with mechanics.

Voting will take place over a 30-day period following two weeks to let pilots study details of the accord, Weaks said.

The new pilots contract, which would extend through Aug. 31, 2020, provides a 15 percent pay increase Oct. 1 to cover the years the pact was being negotiated and 3 percent annual increases going forward. Dallas-based Southwest secured the right to enter marketing agreements with other carriers on some international routes, a move to gain customers at little incremental cost.

Southwest pilots in November rejected a tentative agreement and later sued the airline over flying the latest version of Boeing Co.’s 737 and called for the resignation of Chief Executive Officer Gary Kelly. The current agreement includes provisions for operation of the 737 Max, which Southwest expects to start flying around October next year.