Southwest Rapid Rewards - Southwest wants to begin outsourcing its employees

In what seems like a completely fundamental change in attitude from an airline who has historically prided itself on being a great employer and one who has treated it's people well, Southwest is now looking for it's ground operations department (which encompasses ramp, operations, and provisioning) to accept terms on it's next contract to allow for up to 20% of staffing to be replaced by outside contracted employees.

Many Southwest Airlines loyalists would argue that the superior customer service and treatment by Southwest employees are a deciding factor in why they continue to use Southwest. Now some of the very staff who are largely responsible for that quality customer experience may be replaced by employees of 3rd party contracting companies with significantly lower pay rates, and benefits (if any).

I'm just curious how some of Southwest's best customers feel about something like that.

http://www.cbsnews.com/8301-505244_1...tsource-some-jobs/?tag=mncol;lst;9

"I'm just curious how some of Southwest's best customers feel about something like that."

How do I feel? Not well, thank you.

It is just further confirmation that the Southwest brand, built by Herb Kelleher and a team of true aviation fanatics, has deteriorated into a business-school-spreadsheet abomination.

Perhaps someday Southwest will get its groove back, but, in the meantime, the management team just continues to sell the seed corn in search of quarterly income for stockholders and for themselves.

That's how I feel. :(

Ground ops has little or no customer contact, so your perceived degradation of service isn't a factor - and your perspective as a WN employee colors your view. If this move will allow WN fares to return to competitiveness, which is now often lacking, it's a smart action.

I'm just curious how some of Southwest's best customers feel about something like that.

I can guess how you feel about it as an employee. As a customer, I have no opinion until I see what Southwest does with this. If the idea is to provide surge capability under supervision of Southwest employees, that sounds low risk and high return (reducing overtime requirements).

I figure that any cost reductions or increases eventually work their way into fares. Therefore what matters is the balance of cost and quality. I have no way to estimate that ahead of time, and possibly no way even after the fact.

Not sure why your link didn't work (or if it's me), but I found it on CBS' website. Here is my attempt at pasting the link:

http://www.cbsnews.com/8301-505244_162-57456152/union-says-southwest-wants-to-outsource-some-jobs/?tag=mncol;lst;9

I have been so disappointed in Southwest over the last year or so that I have booked only one paid flight on them. We are using up our RR tickets and booking paid flights mostly on jetBlue - just got the jetBlue Amex and will cancel our SW visa. I check on SW now just out of curiosity.

But I find this news yet another disappointment which only reinforces our decision to use another airline. I hope the employee's union stands up to the myopic corporate leadership.

I have been so disappointed in Southwest over the last year or so that I have booked only one paid flight on them. We are using up our RR tickets and booking paid flights mostly on jetBlue - just got the jetBlue Amex and will cancel our SW visa. I check on SW now just out of curiosity.

But I find this news yet another disappointment which only reinforces our decision to use another airline. I hope the employee's union stands up to the myopic corporate leadership.

It's pretty hard to reconcile that approach intellectually. You want Southwest's unions to fight back on this change yet you spend your money with a 100% non-unionized airline, B6. :eek:

http://www.laborunionreport.com/portal/2011/08/jetblue-remains-the-only-major-u-s-based-airlines-that-is-100-union-free/

It's pretty hard to reconcile that approach intellectually. You want Southwest's unions to fight back on this change yet you spend your money with a 100% non-unionized airline, B6. :eek:

http://www.laborunionreport.com/portal/2011/08/jetblue-remains-the-only-major-u-s-based-airlines-that-is-100-union-free/

My reason for leaving Southwest and going to jetBlue is about how they treat US (as passengers and frequent flyers).

I do hope SW labor union stops the outsourcing for the benefit of those employees.

num1bearsfan
I'm just curious how some of Southwest's best customers feel about something like that.

Generally it is not a good idea to try to negotiate a contract through a public customer website for a number of reasons - not the least of which is that it demonstrates how little the Customer really does care.

this will be as effective in reducing CASM as replacing the toilet paper at HQ with one ply

It was never our intention to save money or decrease employee count/benefits. But we are now pleased to forceast an extra x million in profit each year as a result.

If a company outsources they can either do it to save money, or to make use of someone more specialized/experienced. If outsourced, why can a company receive similar job duties at a cheaper price? the logical conclusion is they are depriving that person from receiving benefits similar to what a full time company employee equivalent would get.

In our area, it's all the rage for schools to try and do this with their bus drivers to save on health insurance and pensions. The bus companies come in, rent the buses from the schools, make their own profit, pay their employees and still beat the school's old operating costs. Turnover goes way up, and morale goes down.

RAMP: Does this mean we'd see less experienced operators at the ramp area? just MAYBE less likely to engage in teamwork and or escalate any issues?

PROVISIONING: Any efficiency loss from less experience?

OPERATIONS: Would this in any way lower ability to operate/recover as quickly in the event of irregular operations? I've seen dozens of instances where Southwest can get flights in and out quickly (10-20 minute turn, getting a flight out right before an airport closure due to weather, etc) while other airlines can't react quickly and have hundreds of people queued up for flight changes. If a contractor provides service for 3-4 airlines, who gets their full attention?

When I think about any airline outsourcing, two recent articles give me cause for concern: June 2012:the (contracted)ring of workers for a baggage handling and maintenance company in San Juan (http://airnation.net/2012/06/08/american-employees-busted-drug-smuggling/)and also fears that a terrorist would have a much easier/quicker time getting access as a contracted employee than as a direct hire. May 2012: a (contracted) Newark airport security provider who employed an illegal immigrant with a fake ID for 20 years. (http://articles.latimes.com/2012/may/15/nation/la-na-nn-airport-security-20120515)

The most recent WN transit workers 555 contract ALREADY allows (http://twu555.org/portals/12/PDFfiles/2008-201120CBA.pdf) third party contractors for airports that have 12 or less departures per day. This new proposal by Southwest is thus definitely a cash grab.

I'm just wondering what other gimmicks Gary will come up with to deal with the underperforming stock.

...maybe he can reduce the weight of on board waste by letting male pax pee out the window and make yellow patterns in the clouds, or instead of Economy Plus, Evo Plus - an extra row of bench seating that gets the plane to 150 seats and maximizes the pax/FA ratio...or how about COS Select - every pax over 300 lbs gets extra knee room, lots of extra knee room, by being offered a Standing Room Only spot in the galley

no way the union will vote for contract workers, moral at my station is already at an all time low, if contract workers come in southwest will suffer, call outs, protests, strikes, delays, missed bags

Ground ops has little or no customer contact, so your perceived degradation of service isn't a factor - and your perspective as a WN employee colors your view. If this move will allow WN fares to return to competitiveness, which is now often lacking, it's a smart action.

Ground operations is very much customer contact. An operations agent is the one who is at the podium boarding every flight, making gate announcements, and giving individual attention to special needs boarding passengers. But putting that aside, what goes on behind the scenes and under the wing absolutely plays a role in the customer experience. Believe me when I tell you Southwest employees routinely go out of their way to make things happen that other airlines and certainly contractors would never even bother with. Check into your flight 15 minutes prior to departure somewhere else and see if your bag makes it onto the plane. Come in on a late inbound and see if your connecting flight is holding for YOU anywhere else. The overall workload that we take on and the pace that we do it at is unmatched in the airline industry, but we're happy to do it because we're well taken care of. See if a $9 an hour employee is going to give a flying fart about YOU when he's on flight number 4 for the day. Maybe he'll drive that miss sorted bag across the ramp to meet it's next flight in 2 minutes,.. or maybe he wont. See if that agent at the gate has a smile on his or her face when he/she is worried about problems at home because she has no health insurance.

As an employee, my perspective on things is that of someone who KNOWS. It's not a matter of a colored view. I know what we do, and I know the difference. I've worked at other airlines, and along side other airline employees. I see the contractor people and I see what level of work ethic they have. With all due respect, what do you know? How much time have you spent with airline operations at Southwest?

here's a recent (but separate) matter being discussed on the Airtran forum

Ramp Outsourcing at 7 AirTran stations
(http://www.forestville.com/cms/lib/NY19000591/Centricity/Domain/6/201206ell.pdf)

The original poster, wahooflyer, made a great comment at the end of his post: Good luck with the rent-a-rampers, Southwest. You need look no further than the Alaska Airlines/Menzies ramp outsourcing in SEA to see what's going to happen at these small stations. I fly US Airways out of RIC frequently (which has outsourced its ramp at almost all stations) and see bags flying off the carts and lots of other ramp carelessness all the time. That's the kind of people you'll get when you hire a contractor paying $7.50 an hour.

Wahooflyer also pointed out that the most recent WN transit workers 555 contract ALREADY allows (http://twu555.org/portals/12/PDFfiles/2008-201120CBA.pdf) third party contractors for airports that have 12 or less departures per day. This is definitely a cash grab.

The overall workload that we take on and the pace that we do it at is unmatched in the airline industry, but we're happy to do it because we're well taken care of.

That was a great post, num1bearsfan. Being part of a winning team is good for everyone. Herb knew that.

As I see it, the problem is that Herb had a big cost advantage over legacy carriers. He was able to share that cost advantage with the employees to create a special kind of company. More recently, fuel hedges provided the cost advantage which was again shared between customers and employees (but not stockholders).

Now Southwest has no cost advantage. Competitors have defaulted via bankruptcy to reset their costs. The likely result is traditional labor strife. Customers have already seen the cutbacks, and you see that reflected in the harsher attitudes of posters here compared to the days of double RR credits on $29 fares.

Yes, we customers recognize business reality. I'm sure employees do too. That doesn't make it any more enjoyable. We sure had a great time while Southwest was on top of the world, didn't we?

I'm with holding judgement until...

A) The use of contractors impacts the service I receive.

B) I see where these contractors are actually placed.


It seems to be entirely possible that they only get placed at small stations with limited flights where it is more cost effective to use them rather than full time staff. With all the talk about WN adding Hawaii and International flights, it is possible this change is also related to those potential new stations where they may not need full time staff for only a few flights a day.

... it is possible this change is also related to those potential new stations where they may not need full time staff for only a few flights a day.

Unfortunately based on reading the most recent approved contract that had already been in effect, this is not the case. Southwest can already run up to 12 flights a day using contractors at smaller stations.

Check into your flight 15 minutes prior to departure somewhere else and see if your bag makes it onto the plane. Come in on a late inbound and see if your connecting flight is holding for YOU anywhere else. The overall workload that we take on and the pace that we do it at is unmatched in the airline industry, but we're happy to do it because we're well taken care of. See if a $9 an hour employee is going to give a flying fart about YOU when he's on flight number 4 for the day. Maybe he'll drive that miss sorted bag across the ramp to meet it's next flight in 2 minutes,.. or maybe he wont. See if that agent at the gate has a smile on his or her face when he/she is worried about problems at home because she has no health insurance.


Let me ask you a question, do you believe that the SWA ramp suffers from inefficient policies and procedures (as well as complacency upstairs) which in turn reflect the bag numbers that we now have?

Quote:
Originally Posted by smmrfld
If this move will allow WN fares to return to competitiveness, which is now often lacking, it's a smart action.

num1bearsfan Quote:
As an employee, my perspective on things is that of someone who KNOWS... With all due respect, what do you know? How much time have you spent with airline operations at Southwest?


With all due respect, you start a thread - ostensibly asking for Customer opinions about a current employee contract negotiating item. Then when a Customer states their opinion, you say "what do you know?"?

I was a contractor ramp agent for an airline back in college. And I've been a contractor for Motorola as well. I can assure you, the pay is less, the benefits suck, the morale is lower, and contract employers get treated like crap by the actual employees of the company.

With that said, I completely understand why WN is headed this way. Pretty much all the big legacies will have much cheaper labor costs because they were all able to trash their union contracts via the bankruptcy reorg process.

Keep in mind that this action by WN is most certainly a negotiating tactic with the ramp agent unions. If they can get these union employees to compromise and negotiate and reach amicable terms, the threat of contract workers will go away. At least until the contract is up for negotiation again...

Ground operations is very much customer contact. An operations agent is the one who is at the podium boarding every flight, making gate announcements, and giving individual attention to special needs boarding passengers. But putting that aside, what goes on behind the scenes and under the wing absolutely plays a role in the customer experience. Believe me when I tell you Southwest employees routinely go out of their way to make things happen that other airlines and certainly contractors would never even bother with. Check into your flight 15 minutes prior to departure somewhere else and see if your bag makes it onto the plane. Come in on a late inbound and see if your connecting flight is holding for YOU anywhere else. The overall workload that we take on and the pace that we do it at is unmatched in the airline industry, but we're happy to do it because we're well taken care of. See if a $9 an hour employee is going to give a flying fart about YOU when he's on flight number 4 for the day. Maybe he'll drive that miss sorted bag across the ramp to meet it's next flight in 2 minutes,.. or maybe he wont. See if that agent at the gate has a smile on his or her face when he/she is worried about problems at home because she has no health insurance.

As an employee, my perspective on things is that of someone who KNOWS. It's not a matter of a colored view. I know what we do, and I know the difference. I've worked at other airlines, and along side other airline employees. I see the contractor people and I see what level of work ethic they have. With all due respect, what do you know? How much time have you spent with airline operations at Southwest?


great post, I have personally seen how bad it is at contract levels, it costed UA thousands of $$$, contract employees not charging for extra interline bags because it was easier to throw them on the belt then 5 extra minutes filling out paperwork, not charging for change fees, not repricing tickets, etc
Why because they and myself didn't care because UA didn't care. Slave wages and no flight benefits working UA flights.

Since working for southwest, there was a time where a customers flight arrived late and had 10 minutes to make another flight, I personally went over to the gate and picked the bag and loaded it,the bag beat the passenger to the plane. I guarantee the passenger didn't think the bag was going to arrive.

There was another time after working 16 hours, getting off at 3am in the morning, and taking 1 hour out of my time helping a SW customer who left a laptop on the plane and going back to work at 6am. :eek:

Take care of me and Ill take care of our customers :)

In what seems like a completely fundamental change in attitude

How is this a fundamental change in attitude? :confused: It seems totally consistent with Southwest's current attitudes. If they could outsource rampers all the way to India and add 1 cent to this quarter's earnings, they'd do it in a heartbeat.



Oh...I'm sorry...you were probably talking about the *old* Southwest, right? ;) That airline is dead...remember, that airline almost went Chapter 7 bankrupt thanks to years of massive losses caused by the Rapid Rewards program and drink coupons with no expiration dates.

num1bearsfan,
As a matter of fact, SWA was a leader in US airlines to start outsourcing (heavy maintenance) years & years ago.

Contracted Ground Ops in smaller, geographically-displaced stations can sometimes be much more accountable and effectively managed for insuring performance.

I understand that the Chicago winters are bleak, but you're never gonna get into the Hawaii station, whether it's in-house (you're not senior enough) or contracted.

If a company outsources they can either do it to save money, or to make use of someone more specialized/experienced. If outsourced, why can a company receive similar job duties at a cheaper price?the logical conclusion is they are depriving that person from receiving benefits similar to what a full time company employee equivalent would get.

There is another logical conclusion: The unionized employee is overpaid and someone else is willing to work for less.

My question to the union would be: why not work with management to reduce costs, improve efficiency, and allow part-timers where necessary? I remember America West's mini-hub at CMH back in the 90's. America West hired part-timers to work many of the functions, due to the hub's small size, and their employees were very happy (according to my friends there at the time). They employed alot of military and other early retirees.

Ground operations is very much customer contact. An operations agent is the one who is at the podium boarding every flight, making gate announcements, and giving individual attention to special needs boarding passengers. But putting that aside, what goes on behind the scenes and under the wing absolutely plays a role in the customer experience. Believe me when I tell you Southwest employees routinely go out of their way to make things happen that other airlines and certainly contractors would never even bother with. Check into your flight 15 minutes prior to departure somewhere else and see if your bag makes it onto the plane. Come in on a late inbound and see if your connecting flight is holding for YOU anywhere else. The overall workload that we take on and the pace that we do it at is unmatched in the airline industry, but we're happy to do it because we're well taken care of. See if a $9 an hour employee is going to give a flying fart about YOU when he's on flight number 4 for the day. Maybe he'll drive that miss sorted bag across the ramp to meet it's next flight in 2 minutes,.. or maybe he wont. See if that agent at the gate has a smile on his or her face when he/she is worried about problems at home because she has no health insurance.

As an employee, my perspective on things is that of someone who KNOWS. It's not a matter of a colored view. I know what we do, and I know the difference. I've worked at other airlines, and along side other airline employees. I see the contractor people and I see what level of work ethic they have. With all due respect, what do you know? How much time have you spent with airline operations at Southwest?

I see. So you ask what we think and then spout off when we offer a viewpoint that obviously differs from yours? You realize you're not representing your position very well, right?

I've had Southwest choose not to hold a plane for me when my inbound was late. I've also had them do it, and I've had United and US Airways both do it too. I assume that decision lies somewhere beyond the ground staff working that aircraft.

I seriously, seriously doubt that I could walk into an airport, 15 minutes prior to departure, and check a bag that makes it onto that flight. Southwest or any other airline. (I'd be lucky to get myself with no checked bags onto the flight!) I think I'd have a *better* shot if I pulled that stunt at some tiny out-of-the-way US Airways Express station working a single 7AM Dash-8 departure, but even then I wouldn't expect it.

Of course none of this has anything to do with labor-market equilibrium rates for ground staff. I've personally worked as a pure contractor (1099), a consultant with external clients (W-2, but located on a client site mostly), and as one with primarily internal clients (W-2, located on employer site). I don't tihnk one structure led me to be a better or worse employee. Clearly the more strategic the role, the more you want it fully in-house. But I don't see how outsourcing ops has to lead to poor ops.

I seriously, seriously doubt that I could walk into an airport, 15 minutes prior to departure, and check a bag that makes it onto that flight. Southwest or any other airline.

I did it 13 minutes before departure once about 8 years ago, before the TSA was screening bags.

What a tempest in a teapot. Southwest has outsourced much of its maintenance for decades, so outsourcing is nothing new at WN.

From the 2011 10-K:

The Company performs substantially all line maintenance on its aircraft and provides ground support services at most of the airports it serves. However, the Company has arrangements with certain aircraft maintenance firms for major component inspections and repairs for its airframes and engines, which comprise the majority of the Company’s annual aircraft maintenance costs.


Aircraft and engine maintenance

The cost of scheduled inspections and repairs and routine maintenance costs for all aircraft and engines are charged to Maintenance materials and repairs expense as incurred. The Company has “power-by-the-hour” agreements related to its Boeing 737-700 engines and AirTran’s Boeing 717-200 engines with external service providers. Under these agreements, which the Company has determined effectively transfer the risk associated with the maintenance on such engines to the counterparty, expense is recorded commensurate with each hour flown on an engine. The Company modified its engine maintenance contract for its Classic fleet (737-300/500s) during fourth quarter 2011 and although payments made under this contract are made under a “power-by-the-hour” basis, the risk-transfer concept under this agreement is no longer met, and the Company now records expense on a time and materials basis when an engine repair event takes place.

http://southwest.investorroom.com/download/2011+Annual+Report.PDF

Let's review: Southwest already outsources all of its engine and major component overhaul along with nearly all of its heavy airframe overhaul. WN planes can be found alongside jetBlue planes at Aeroman in El Salvador, being overhauled by experienced mechanics making about $5/hour, assisted by a small army of non-licensed helpers making about $2/hr.

http://www.kirotv.com/news/news/third-world-mechanics-paid-2-per-hour-for-boeing-a/nDNwr/

http://www.nbcdfw.com/news/business/Southwest-Airlines-Will-Send-Planes-to-El-Salvador-For-Maintanence.html

Not all of WN's planes are overhauled in El Salvador; others are overhauled at nonunion MROs here in the US.

And we're supposed to care that WN is looking to outsource baggage handlers and lav truck drivers?

Has some outsourcing of baggage agents already taken place? I flew out of LIT recently, and the curbside people in the SWA area were all wearing black polo shirts with a logo which seemed to be identical to the people shuttling wheelchair passengers back and forth inside the terminal for all airlines -- in other words, employees of the airport and not the airline. Depending on the time of day, this curbside baggage position may be staffed by either SWA or airport personnel. My experience has been that SWA employees are more friendly, work through the lines of waiting passengers MUCH faster, and generally do a better job of taking car of business. These guys, the first contact at the airport between passenger and airline, can either start the trip off on a positive note or help to put a chip on the passenger's shoulder. A well managed, passenger service oriented company would surely want their own employees in that critical first contact position. It is unfortunate if SWA is no longer that company.

What do I think?

If WN needs to outsource some jobs to bring back competitive fares, then I'm all for it. Perhaps if labor unions would learn the concept of "give a little", this wouldn't be necessary.

no way the union will vote for contract workers, moral at my station is already at an all time low, if contract workers come in southwest will suffer, call outs, protests, strikes, delays, missed bags

So if "moral (sic) at my station is already at an all time low", maybe there isn't much to lose by outsourcing. Perhaps contractors will appreciate their jobs more. Never know.

"superior customer service and treatment by Southwest employees are a deciding factor in why they continue to use Southwest."

LOL....are you kidding??? Well, WN may not be as terrible at customer service as CO, but still. Their customer service is great, if I were 10 years old and attending fat camp. Nobody has a right to a job at WN and hiring contract employees does not eliminate the number of available jobs out there. Isn't it is a cost savings measure that keeps prices down for the customer?

WN has been doing alot over the last few years to ensure that people stay away in droves. From removing it's greatest proletariat incentive as the cheapest airline to ensuring that those who belong to it's loyalty programs get less and less benefit all the time. Routing is all it has left, and other carriers are catching up to that also (at least in my own market of So. Cal).

20% is a pretty low number and I am sure it will be baggage handlers and (gulp) maintenance.

Based on my experience at BWI and LAS today I don't think Southwest employees could get any worse. Seriously making Spirit look good (actually their employees are quite nice just an awful business so not really a fair comparison)