Just four days after insisting to this reporter that Southwest Airlines management is “not getting the job done,” Paul Jackson, the head of the Southwest Airlines Pilots’ Association (SWAPA), submitted his resignation, effective Dec. 31,2015, to the union’s Board of Directors Tuesday.
Jackson’s exit comes as rumors continue to swirl that Southwest Airlines (NYSE: LUV) CEO Gary Kelly is eager to orchestrate another airline merger, possibly with JetBlue (NASDAQ: BLU) or Frontier Airlines.
But first, sources say, Kelly must get new contracts with key labor groups — including pilots, flight attendants and ramp agents. It’s a goal that has eluded Kelly for years, with failed attempts to get new contracts with flight attendants and pilots coming just in the past several months.
In his resignation letter Jackson said an “institutional change in direction” was necessary at SWAPA, which represents more than 8,000 Southwest pilots, including more than 1,100 domiciled in Chicago, where Southwest has its largest hub at Midway Airport.
Jackson’s comments to this reporter last Friday came after the union rank and file rejected a tentative contract that had been negotiated under Jackson’s tenure as union president. In his letter, Jackson also said the entire negotiating team that helped craft the tentative contract have resigned their roles, a SWAPA spokesman said.
SWAPA vice-president Mike Panebianco will serve in Jackson’s place until election of a new union president is completed by January of 2016, the SWAPA spokesman said. The Board and Panebianco will likely have a hand in appointing a new negotiating team.
The SWAPA spokesman confirmed that Jackson supported the tentative contract presented to rank and file union pilots, a majority of whom ultimately rejected it.
Events at SWAPA surrounding their contract vote surprisingly mirror — with one notable difference — those at Southwest’s flight attendant union, Transport Workers Union Local 556, which represents some 13,500 unionized Southwest flight attendants, including more than 1,800 domiciled in Chicago.
Local 556 rank and file members resoundingly rejected a tentative contract in July, and then pushed for the resignation of Local 556 president Audrey Stone, who was strongly in favor of the proposed contract that irked many flight attendants. But sources said today Stone has resisted efforts by upset Local 556 members to have her removed. Stone reportedly remains in her union leadership role, even as it is unclear when Local 556 might get another tentative deal. “We have received no communication regarding the state of things (from our union),” said one Southwest flight attendant source today.
A SWAPA spokesman said mediated negotiations between the pilots union and Southwest management might not begin until early spring of 2016. But if management and the union mutually agreed to meet without a mediator, talks could begin much sooner, the spokesman indicated.
Meanwhile, sources say Southwest CEO Gary Kelly urgently wants to get deals done with the pilots, flight attendants and ramp agents — all of whom have been negotiating for years with management — so he can proceed with another merger now that the AirTran integration is complete.
Sources say JetBlue or Frontier Airlines are two likely targets for Kelly. JetBlue would instantly give Southwest a much larger presence in the massive New York City market, as well as access to JetBlue’s spiffy terminal at John F. Kennedy International Airport. JetBlue also offers a business class transcontinental product that Southwest could adopt if it wants to start transcontinental flights and attract more high-margin business customers.
Frontier would give Southwest added heft in the the west and the mountain states region, another area where the low fare behemoth has been growing in recent years.
However Kelly’s possible plans play out, some observers say Southwest is likely to be a vastly-changed airline in another decade. “I don’t think you’ll recognized Southwest in 10 years,” predicted one source.
Chicago Business Journal
Jeff Smisek and two other Senior Officials at United Airlines resign
United Airlines said on Tuesday that its chief executive, Jeff Smisek, and two other senior officials had stepped down amid a federal corruption investigation.
The airline is under investigation by the United States attorney in New Jersey over whether it had improperly sought to influence senior officials at the Port Authority of New York and New Jersey.
The company said it had named Oscar Munoz as president and chief executive to replace Mr. Smisek, the company’s chief executive since it merged with Continental Airlines in 2010. Mr. Munoz, a member of the United board, previously served as president and chief operating officer of the rail giant CSX.
“The departures announced today are in connection with the company’s previously disclosed internal investigation related to the federal investigation associated with the Port Authority of New York and New Jersey,” the company said in a statement. “The investigations are ongoing and the company continues to cooperate with the government.”
United’s executive vice president for communications and government affairs, Nene Foxhall, and the senior vice president for corporate and government affairs, Mark R. Anderson, also resigned, the company said.
In February, federal prosecutors issued subpoenas focused on whether the former chairman of the Port
Authority, David Samson, had pushed United to reinstate flights that he used to travel to and from his weekend home in South Carolina.
Ms. Foxhall and Mr. Anderson were among the United officials whose communications with the Port Authority had been subpoenaed.
The Port Authority runs several airports, including Newark Liberty International Airport, one of United’s biggest hubs.
Mr. Samson was appointed by Gov. Chris Christie of New Jersey in 2010. He stepped down in March 2014 when records showed that several senior aides to Mr. Christie worked with Port Authority officials to close down lanes of the George Washington Bridge under false pretenses to punish a mayor.
Several months ago, United asked the law firm Jenner & Block to conduct an internal investigation into the airline’s dealings with Mr. Samson and the Port Authority.
At the time, lawyers close to the case predicted that this would lead to the resignation of Mr. Smisek and possibly other executives, in the hopes that the airline itself could avoid prosecution.
The resignations also complicate the fortunes of Mr. Christie as he tries to resurrect his once-promising presidential bid, by underscoring the accusations of cronyism that have dogged his administration since the bridge scandal broke in early 2014. The governor has distanced himself from other figures implicated in the scandal, saying that they deceived him. But Mr. Samson, despite his resignation, has remained one of the governor’s closest advisers.
Karen Kessler, a spokeswoman for Mr. Samson’s lawyers, said they had no new information about the federal investigation, and she declined to say what it might mean for Mr. Samson. “This is a United matter,” she said.
The New York Times