DOW JONES NEWSWIRES
The board of Southwest Airlines Co.'s (LUV) pilots union
unanimously endorsed a tentative labor pact and agreed to send it
to members for ratification in October.
The Southwest Airlines Pilots' Association's rank and file
narrowly rejected an earlier proposal by the airline in June.
The new five-year agreement allows more flexibility to improve
pilots' quality of life, maintains long-standing scheduling
programs, gives a retirement benefit increase to pilots sooner, and
further restricts the company's ability to codeshare U.S. and
international flights. However, compensation under the new proposal
is slightly less than under the previous one.
The new proposal also ties the next two years' compensation to
the company's performance, Southwest said.
The low-fare giant lost a bankruptcy-court auction for Frontier
Airlines Holdings Inc. to much-smaller rival Republic Airways
Holdings Inc. (RJET) last month after refusing to drop a
contingency clause requiring pilots to first sign off on the
takeover.
The protracted recession has halted Southwest's decades-long
track record of fast growth and fat profits. Some investors are
nervous about Southwest's expansion prospects, and a growing number
of analysts predict the airline this year could post an annual loss
for the first time since its first two years of existence in 1971
and 1972.
Southwest's shares closed Thursday at $9.70, down 1.8%, and were
inactive after hours. The stock has lost more than a third of its
value in the past year.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com