Southwest Airlines began its frontal assault on the US Airways fortress hub of Philadelphia in May but faces a publicity campaign by unions to tarnish its image as it enters the City of Brotherly Love.
The Transport Workers Union, representing Southwest's 7,300 flight attendants, plans to leaflet in Southwest's newest city to call attention to what they see as slow progress toward a new contract. The airline's arrival at Philadelphia, the nation's fifth largest city, has garnered vast positive publicity, but union local president Thom McDaniel says: "We are stepping up our campaign efforts to ensure the people of Philadelphia know how Southwest treats its employees."
The airline and the union have been in contract talks for almost two years, and, McDaniel says, remain far apart on many key issues. The union claims that with new tasks such as security checks, its members are working about 23 hours a month without pay. The airline will not comment on the progress of the negotiations but says it has offered a contract with "industry-leading" pay increases. Credit Suisse First Boston analyst Jim Higgins says the dispute "has the potential to undermine a long tradition of good labour relations" at Southwest.
The carrier's entry into Philadelphia has also gained local attention because the city has never enjoyed low-cost service but has been dependent on US Airways. David Siegel, before his sudden resignation as chief executive, called the looming battle between the two carriers "the fight of our life" and renewed his pleas for further labour concessions.
In mid-April, Siegel had held a special webcast to outline the Southwest challenge and the need for cost cuts. "We can't run from Philadelphia. We're not going to run," he told employees. But, he said: "Last year our average fare was $125. Unfortunately, it cost us $140 to carry that passenger, so every time a passenger got on one of our airplanes last year we were paying them $15." Despite its cost structure, US Airways has no alternative but to match Southwest fares on competitive routes, he added.
By summer, Southwest will have 28 daily flights from Philadelphia, although that pales in comparison to US Airways' nearly 400 daily departures. The new routes are to prime destinations such as Chicago, Tampa, Phoenix, Las Vegas and Los Angeles.
The US Airways pilots union had tentatively agreed to discuss concessions with management but hardliners have ousted union leaders who were willing to negotiate concessions. It was union hostility to cost-cutting that persuaded Siegel to quit.
DAVID FIELD WASHINGTON
Source: Airline Business
