The president of the pilots' union at Southwest Airlines expects most of the union's directors to vote against a new tentative contract with the nation's fourth-biggest airline.
Paul Jackson said Friday that the deal has much for pilots to like, including a 17.6 percent raise in pay over four years. But with Southwest earning record profits, he said the key question is, "When is a deal good enough?"
Southwest earned a record $1.14 billion in net income last year. It earned nearly as much -- another $1.06 billion -- in just the first six months of this year.
The union and Southwest announced Thursday that they had reached a tentative agreement after three years of negotiations. But the union board, which debated the proposed contract for four days, took the unusual step of ordering a ratification vote without endorsing the work of its negotiators.
"A preponderance of our board is likely going to personally vote `No' for this, but they did feel that our membership deserves a chance to vote," Jackson said Friday in an interview.
Southwest said the contract would give pilots industry-leading pay. In a statement, the company said it hoped that pilots would "have the opportunity to evaluate the proposal without distractions."
If Southwest's 8,000 pilots reject the deal, they would be following the course set by Delta Air Lines pilots, who voted in July to turn down an offer that included big pay raises. While the issues are slightly different at each carrier, the votes show how record profits in the airline industry are emboldening unions to seek a greater payoff.
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Results of the Southwest ratification vote are expected by Nov. 4.
The pay raises would cut Southwest's 2016 earnings by about 14 cents per share, said Raymond James analyst Savanthi Syth. The proposal also includes a small raise in matching contributions to 401(k) retirement accounts and puts a profit-sharing plan in the contract.
But it also includes provisions that Southwest wanted, including the chance to expand partnerships with other airlines. That is something that pilots often regard as a job-security threat, so the union insisted on limits, Jackson said.
Shares of Dallas-based Southwest Airlines Co. dipped 2 cents to close at $39.47. They have lost 7 percent this year.
