Originally Posted by
skibikegolf
shiznit
At the time of signing it was a win for both the pilots and the company. The giveback was extending the contract opening by two years (9/1/2004 to 9/1/2006).
The true quid-pro-quo was SWAPA's compelling argument that they could save the company 1 billion dollars. This was done by leveraging the huge wages in effect at the time (DAL $259/hr, UAL $254/hr for 320's and 737's) against the actual pay raises granted to SWAPA and the tax benefits of the two new stock option plans.
You are correct, in that there was a stock option plan from 1995, but the deal in 2001-2002 added two additional stock option plans.
Post 2002 with the trainwreck of bankruptcy's, lost DB and DC plans in the industry, I suspect SWA had a small bit of remorse in agreeing to the size of the gains in 2002.
Nonetheless, it is an amazing company that would even meet with a union to discuss a contract that is 3 years from the ammendable date.
...and there you have it. This sums up the SWA philosophy quite nicely. I play golf with about 15 of them, so I have a pretty good hold on what they think. They don't want the highest rate in the industry, as evidenced by the quote above. That was their chance to actually help the industry bar. Instead, they chose to keep hanging.
Sustainability then came about with some very fortuitous hedging, and then some BK fallout from stupid management at rivals.
Now you throw in a "seniority for sale" sale, and the SWA guys now have an edge on USAPA for underhandedness.
Why WOULDN'T the company talk 3 years early. Lock in less money today, which will be worth even less in 4 years.