Southwest holds the most cash and carries the lowest debt of the major carriers. From 2020 to 2024, we planned on a big, five-year growth run.. Spirit Airlines 6. While the Committee has the powers, authority, duties, and responsibilities set forth in this Charter, the role of the Committee is to assist the Board in its oversight responsibilities. From compensation planning to variable pay to pay equity analysis, we surveyed 4,900+ organizations on how they manage compensation. Southwest's main competitors are-American Airlines, Delta Air Lines, United Airlines, JetBlue Airways, and Air France KLM. Of course, its biggest single cost by far is wages, salaries, and benefits,accounting in 2019 for 43% of operating costs, and for Southwest to survive, that huge nut had to shrink drastically. I dont like paying for checked bags when I didnt check any bags. They looked at me and said we didnt check bags either and then, with a figurative light bulb on their head, said hey, were subsidizing all those bag checkers! We all laughed, but it brings out a point about Southwests fares. But they could reach that goal through a variety of routes, by imposing layoffs, reducing pay, or hiking productivity, or a blend of all three. For details regarding Direct Stock Purchase & Dividend Reinvestment and other Transfer Agent information. He curbed such capital expenditures as tech investments and airport expansions. Also, proxies must disclose specific detailed information regarding the pay practices for certain executives. Thedeparturestotaled 4,500. The point here is that for narrow body service within the U.S., Southwests cost advantage to the big three U.S. airlines has largely gone away the big carriers costs where they fly against Southwest are similar. And despite losing the MAX aircraft, Southwest honored its commitment to serve Honolulu and the other Hawaiian destinations in 2019 and early 2020, worsening the shortage. She is the CEO of Xaris Financial Enterprises and a course facilitator for Cornell University. Programs are available to help Southwest Employees live better on and off the job. We had more customers than we could serve in Denver, Austin, Houston, Fort Lauderdale, Nashville, and more cities, says Kelly. 4.2. Company reviews. To pull this off, Southwest Airlines offered employees a variety of options to retire early or take extended leaves of up to 18 months at 50% or more of their base pay. Southwest Airlines pays employees the most in San Jose, CA and Seattle, WA. It only has a few aircraft types, which helps the airline reduce its costs. Now in its 50s, Southwest has lost some key competitive advantages but also gained some new ones. The employee data is based on information from people who have self-reported their past or current employments at Southwest Airlines. Flight attendant. Loved it! Employees choose from medical coverage options ranging from preferred provider organizations (PPOs) to a high deductible health plan. Many of the folks flying Southwest are regular customers from such hubs as New Yorks LaGuardia and Midway who vacation or do business in Miami, but couldnt fly there on their favorite carrier and didnt want to get stuck in traffic driving south on I-95 from Fort Lauderdale. By contrast, the global industry lost 400,000 workers, and American alone laid off 32,000. Southwest is the only large airline that can compete on price. It also services smaller airports that don't charge as much for gate access. 2022 Southwest Airlines Co. All Rights Reserved. Southwest gives points to customers. Bob Jordan formerly worked as the Executive Vice President of Southwest Airlines, where his salary was $3,049,336. $17.75 per hour. Cancel. They focus on providing the lowest prices for the most popular routes, which means fewer routes will need to be abandon. They allow a customer to cancel a reservation up to 10 minutes before the flight's departure. Its more than just a paycheck. There are many reasons that United, followed quickly by Delta and American, chose to cancel change fees for higher-fare paying customers. We've made recognizing one another easier through our SWAG platform and by celebrating several milestones throughout an Employee's Southwest journey. Southwest Airlines employees rated their Positive Business Outlook 3% higher than United Airlines employees rated theirs. Southwest Airlines employees earn an average salary of $41,081 in 2023, with a range from $19,000 to $87,000. What Is The Salary Of The Ceo Of Southwest Airlines? Southwest Airlines is strong from both a size and a cost perspective. If Southwest exercises all optionsa strong possibility if its growth opportunities match Kellys expectationsit could operate a fleet of almost 1,100 planes in 10 years, an increase in capacity of 50%. Sources of data may include, but are not limited to, the BLS, company filings, estimates based on those filings, H1B filings, and other public and private datasets. So Miami International is now charging flat monthly fees to carriers that provide high volumes of flights. Low-cost carriers, such as Southwest, have several critical advantages over their competitors. The finance organizational function also pays relatively high compared to other departments, where employees earn $77,729. Starting in mid-November, Southwestintroduced service to Colorados Steamboat Springs, Telluride, and Colorado Springs; Californias Fresno, Santa Barbara, and Palm Springs; Floridas Sarasota/Bradenton and Destin/Fort Walton Beach; and Savannah/Hilton Head, as well as eight other first-time destinations. Did not get the job I really wanted, its been a long process to get back in with UA and its not going as expected. Core Competencies in Business: Finding a Competitive Advantage, Overview of Insurtech & Its Impact on the Insurance Industry, Cost Per Available Seat Mile (CASM): Definition, Formula, Example, Value Chain: Definition, Model, Analysis, and Example, business model around low operating costs. Southwest Airlines (LUV) has become known over the past two decades as a thriving airline company operating in a time when most airlines have been struggling. But one of the structurally difficult things about the airline business is that two key components people and airplanes tend to get more expensive as they get older. Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as "plans," "believes," "expects," "anticipates," "may," "could," "intends," "goal," "will," "should," and similar expressions and variations thereof. To stanch the bleeding,Kelly indeed slashed outlays. In 2015, Southwest Airlines became the leading carrier in terms of market share and surpassed its main competitors, American Airlines and Delta Air Lines. Southwest Employees play a large role in making a positive difference in the communities we serve. Q1 2023 Southwest Airlines Financial Results Conference Call. Checked baggage is mostly a leisure traveler behavior. Plus, as competitors retreated, the top budget carrier had a chance to gain footholds in congested airports that it might never see again. How do Southwest Employees wages, benefits, and work rules compare to other airlines in the U.S.? Based on our analysis, the employees in engineering earn salaries at Southwest Airlines that are well above average, with yearly earnings averaging $104,949. Total Cash Compensation information is comprised of yearly Base Pay and Bonuses. Average Frozen Food Express Industries Salary, Working at Frozen Food Express Industries. 9/11 was awful, but we recovered quickly, he observes. Current Employee - Senior Software Developer. How Much Does Southwest Airlines Pay Compared To Delta Air Lines? For contract, or union workers, the airline directed each group to reduce its 2019 costs by 10% in 2021. These flexible policies help the airline to build high levels of brand loyalty. Overall, Southwest axed outlays of $8 billion in what Kelly calls cold, hard cash.That drive lowered combined operating expenses and capex by 40% versus 2019. Vision coverage is an available option for Employees and their families, and includes complete eye exams and contact lenses, or lenses and frames. Delta Air Lines employees rated their Positive Business Outlook 7% higher than Southwest Airlines employees rated theirs. FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. "Refunds For Flight Reservations.". In one of his 71 online broadcasts to employeesduring the crisis, Kelly on Oct. 15 declared, The Payroll Supportprogramallowed us to operate without pay cuts or furloughs through Sept. 30, but it didnt go far enough or long enoughNow its time to do what must be done to save Southwest.. Compare Southwest Airlines with. Suddenly, that new arrangement hasmade Miami much more attractive to low-cost competition. Compare. A shift towards, Handling involuntary termination is a likely occurrence for human resources managers and, Return better results with Payscale job search, Compare real living costs across different states, Consider potential directions your career can take, Calculate the 20-year net ROI for US-based colleges, Are you the kind of person who struggles to get a handle, Learn where the best career earners attended college. And, with pass agreements from other airlines and discounts with rental car companies, hotels, theme parks, and more, Employees can choose their own adventure. The median salary in Seattle, WA is $48,057. The information shown here is a reporting of information included in the company's proxy statement. Use of the Southwest websites and our Company Information This growth has made them a major carrier of business travelers, who choose Southwest because of their high frequency in and among big cities, good reliability, and easy usage rules without a lot of fees. Per its business model, Southwest hires employees who embody the company's brand messaging and who have a passion for helping customers. Yet he always returns to the human factor, the view that the assets the carrier most prizes are its people. The third program allowed workers to take time off in short spurts, a few hours or a day, a week, or a month at a time, also at half-pay. But at the same time, he showed the vision and moxie to pursue a superambitious flight plan for growth. In many markets where United overlaps with Southwest, United can match the flight frequency while offering the higher-cost things Southwest doesnt: assigned seats, business class optionality, airport lounges, frequent flier points that can get you anywhere in the world, and a set of worldwide airline partners. In addition, the Committee shall have the powers, authority, duties, and responsibilities described below. Theyre centered around supporting the physical, mental, and financial health and wellbeing of our Employees and their families. Write by: . But whether Southwest was a primary reason or simply collateral damage, this change affects it significantly and will likely require more changes to keep its position among the once-frequent business travelers. Employees can save money by making tax-free contributions to flexible spending accounts for health-care and dependent childcare. When business conditions decline, only the strong survive. Southwest is a great airline and has been for many years. 4.0. A typical senior software engineer salary at Southwest Airlines is $120,951. The problem was that the airport charged what amounted to big fees per passenger that were traditionally several times higher than in Fort Lauderdale. The COVID hit was far more damaging because we kept getting false dawns, then it would go on and on.. Nevertheless, Southwest has managed to beat the odds, with a 96% retention rate, 44 straight years of profitability, and no layoffs in their history. As part of those two deals, it secured an additional 187 options on MAX aircraft. Yes, they still run great sales now and then. The Committee shall meet as often as the Committee, the Board, or the Chair of the Committee may deem necessary or appropriate for the Committee to fulfill its responsibilities. This time, they took advantage of once-in-a-lifetime opportunities.. On March 13, 2020 most Employees will receive 10 percent of eligible compensation as a contribution to the . Paper enlightens that if a service firm gives priority to its employees than customers, it automatically serves customers in better way as services of a company are given through employees and. Other roles at Southwest Airlines include manager, custom support and services and cashier. However, there are many more factors that go into this competitive advantage. . Thorough reviews have been conducted to assure this data accurately reflects disclosures. Southwest Airlines is more flexible than most other large airlines. One of these is Southwest's cancellation policy. All Employees receive basic term life insurance at no cost. Theyd never seen that from Southwest before. If the unions didnt come through, the workforce would shrink by 6,000, or over 10%. Once again, Kelly leaped in. Southwest Airlines co-founder Herb Kelleher said " the business of business is people ," and Southwest's leadership still takes that message to heart. Adds Watterson: We were looking for ways to keep people busy and reduce cash burn.. Dominating the wish list of 50 destinations were smaller, beach-or-mountain vacation venues. The Committee shall maintain minutes of its meetings and report on its activities to the full Board. Southwest. In fact, it didnt do either one. Each week when the finance team sent me the figures for our operations, they would provide commentary that was typically upbeat, he toldFortune. In the past, that didnt happen because the airport was chockablock with takeoffs and landings. Gary Kelly had no visibility. In the spring, youd walk throughChicago Midway, one of Southwests busiest hubs, and see 15 people, says White. Still, Southwests balance sheet is in the best shape by far among the majors. This is especially true in the uncertain demand environment that all airlines face today. Dominating its current fleet is the aging Boeing 737-700, averaging 12 years in the skies. If Southwest does lose some of its significant business base as a result of the change fee going away, baggage would be an obvious place for it to recover some of that lost revenue. The Company assumes no obligation to update any forward-looking statements as a result of new information, future events, or developments, except as required by federal securities laws. Employees can choose from a broad spectrum of investment options and roll over any eligible funds from a previous employer. Need to Know. SOUTHWEST AIRLINES CO income statements for executive base pay and bonus are filed yearly with the SEC in the edgar filing system. Opinions expressed by Forbes Contributors are their own. A lot of operating expenses flow from customer volumes, he notes. As Americans line up once again at the ticket counters, its likely that Southwest will begin its second half-century in a much stronger position versus American, United, and Delta than before the pandemic. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. It said, We have no words to describe the damage. We thought getting into OHare would be impossible, says Watterson. Southwest prides itself on being a people-oriented airline that operates with friendly and approachable employees and team members. Southwest had no extra planes, since it had already retired 67 of its aging Boeing 737-300s to make way for the MAX. Southwest Airlines offers automated options to receive Investor Alerts. The atmospherics were like something out of a disaster movie. We had to make the flight anyway so that the plane could make the return trip.. If enrolled in a high deductible plan, a health savings account (HSA) is available for Employees to save for eligible healthcare expensesnow or in the future. Employees in the top 10 percent can make over $87,000 per year, while employees at the bottom 10 percent earn less than $19,000 per year. Delta Air Lines employees rated their Recommend to a friend 8% higher than Southwest Airlines employees rated theirs. 4.0. Timothy Li is a consultant, accountant, and finance manager with an MBA from USC and over 15 years of corporate finance experience. When were looking for leisure customers, the best places are those smaller locales, says Watterson. SOUTHWEST AIRLINES 2 Evaluate a company's recent (within the last year) actions dealing with risk and uncertainty. A comeback on that scale would be heroic, considering the depth of the drop, and how long the pandemic crunched air travel to the levels of the 1970s. The estimated hourly pay at Southwest Airlines ranges from approximately $9.46 per hour for Revenue Manager to $68.65 per hour for Tableau Developer. In addition, it is not the Committees responsibility to assure that the Company complies with specific legal requirements of the Companys policies. Id never read a message from the finance staff anything like that dark. The purpose of the Compensation Committee (the Committee) of the Board of Directors (the Board) of Southwest Airlines Co. (the Company) is to assist the Board with its oversight of (i) compensation of the Companys executives and other employees, as well as non-employee members of the Board; (ii) succession planning; and (iii) human resources policies and practices.