New Southwest pilots deal to limit codeshares

Washington DC
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Southwest Airlines has agreed as part of a new tentative contract with its pilots union to not pursue any codeshare agreements with domestic carriers and to limit the number of codeshares it has with foreign carriers.

The Dallas-based low-cost carrier and the Southwest Airlines Pilots Association (SWAPA) announced on 30 January it had forged a new five-year contract that is now subject to member ratification.

A SWAPA spokesman says the contract's details will not be released until the beginning of March, when the proposed deal will be distributed to members. But he tells ATI the contract includes "no domestic codeshares without SWAPA's permission" and "for international codeshares there are limits".

Some Southwest pilots raised concerns after the carrier forged codeshare deals last year with Canadian low-cost carrier WestJet and Mexican low-cost carrier Volaris. Some pilots were also concerned about the prospect of future domestic codeshares after a codeshare with ATA Airlines ended when ATA ceased operations last April.

"ATA's arrangement brought us gates in Midway, so that worked out," the spokesman says. "But the pilots wanted limits on codeshares because while we're not growing we are starting to codeshare with other carriers."

Domestically, the spokesman says the union doesn't believe Southwest needs a partner in its "backyard" because Southwest already is the largest domestic carrier. On international routes, SWAPA has been questioning why Southwest can't fly these with their own aircraft rather than rely on WestJet and Volaris.

According to the SWAPA spokesman, members told union leaders to make scope and job security their number one priority in new contract negotiations. As a result limiting codeshares is an important component of the new contract. Southwest's current pilot contract has no limitations on codeshares.

But while the spokesman says the new contract bans domestic codeshares and "there is a limitation on the number of international codeshares," he would not say exactly how this number will be limited.

"There's lots of ways caps can be placed on it," the spokesman says, refusing to say if Southwest will be restricted based on the number of foreign carriers it can codeshare with or the number of international routes that can be operated by partner carriers.

One option would be to require Southwest to start operating its own aircraft on transborder routes once the codeshares with WestJet and Volaris reach a certain level. But this could require Southwest to renegotiate its codeshare deals as Volaris CEO Enrique Beltranena said in November that its codeshare pact with Southwest gives it the exclusive right to operate all US-Mexico flights.

Volaris, which plans to launch services to the US late this year, has said it aims to fly to 10 US airports by the end of 2015. WestJet already serves the US but plans to start carrying the Southwest code on its transborder flights in the second half of this year and has said the new partnership should help it secure 20% to 25% of the transborder market.

The new pilot contract at Southwest could potentially limit the expansion of WestJet and Volaris in the US as well as make it difficult for other foreign carriers to tie up with Southwest. It will also likely prevent Southwest from partnering with other US carriers such as AirTran Airways, which has said it would be interested in codesharing with Southwest. AirTran has very little overlap with Southwest and already has a co-marketing arrangement with Frontier Airlines which could be expanded into a codeshare.

The SWAPA spokesman says members will vote on the proposed new contract sometime between mid April and mid May "if everything goes on schedule". He says the union is still finalising some of the language.

The language should be written by the end of the month, allowing the union board to vote in the first week of March on whether to endorse the contract. The contract will then be distributed to all members, who will have about 75 days to review it before voting.