Southwest Airlines has always prided itself on its upbeat, go-the-extra-mile workforce. For us, look no further than the precise turns its ground support staff have done since the first day the airline flew its intrastate routes in Texas more than 40 years. That punctuality is exactly what helped the airline make its mark.
In turn, the airline has supported its workers with increasing wages and no layoffs even as other airlines were eliminating 160,000 jobs last decade.
A strong relationship with 37,000 employees is certainly a tremendous accomplishment for a heavily unionized, publicly traded, $15 billion corporation in, as one publication recently put it, a “profit-obsessed, viciously Darwinian industry.”
Charles, however, might have the last word over the missing link between labor costs and customer service.
As one of our favorite aviation bloggers said yesterday, Southwest might still be known as a low-cost carrier, just not the lowest-cost carrier.
“With growth non-existent and profits being squeezed,” says The Cranky Flier, “it’s just a matter of time before a labor fight turns ugly.”
Here’s a picture of ramp workers taken last week by the Transport Workers Union at the airline’s busiest location, Midway International Airport. Other union members handed out flyers to passengers at check-in to drum up public support for what the union says is a proposal to outsource 20 percent of its ground support work to nonunion outsiders.
The flyer notes the union and the airline have been in contract negotiations for almost one year and reminds passengers of the folks behind the airline’s tremendously successful “Bags Fly Free” campaign.
“While contract workers are not uncommon at other airlines, Southwest Airlines has always operated differently,” the flyer says. “For over 40 years, our culture has focused on the highest quality customer service delivered by dedicated, career employees. It is difficult to believe temporary contract workers, who do not have the same vested interest in the success of our great airline, can provide the same level of exceptional service our customers expect from Southwest Airlines.”
We exchanged emails with Southwest yesterday and spokesman Paul Flaningan told us that the negotiations are “dynamic and proposals are still in the process of being exchanged.”
While he said it was too premature to discuss the talks, Flaningan added “Southwest remains committed to negotiating a contract that protects job stability and benefits of our dedicated ramp, operations, provisioning and freight agents, while at the same time protecting Southwest's long-term profitability.”
A large extent of that profitability is a direct result of the hard work done on the ramp. According to Southwest, the “Bags Fly Free” campaign added a full percentage to its market share in little more than a year, increased passenger loads by 10 percent and increased profits from $99 million in 2009 to $459 million just one year later.
But even great customer service like this won’t help the airline overcome its costs.
As American Airlines declared bankruptcy last year, Southwest Airline’s CEO Gary Kelly sent out a company memo that both exalted his employees’ customer service skills and zeroed in on his employees’ high labor rates:
“While an airline needs to be good at many things to be successful; low costs and profitability, ultimately, mean the difference between survival or not … All the majors … have gone bankrupt. Pan Am. Eastern. Braniff. Continental. America West. TWA. US Air. United. Delta. Northwest. And now, American. Every single one failed. Why? Not because of Customer Service, but because of high costs. Great Customer Service cannot overcome high costs.”
