Deal with pilots would let Southwest fly bigger 737s, making long routes viable

Southwest Airlines Co. and its pilots' union said Thursday that they have worked out a deal that would let the Dallas carrier operate a larger version of the Boeing 737.

While Southwest has not announced a final decision to acquire the Boeing 737-800, Southwest executives have made it clear they would like to bring the 175-seat version of the aircraft into their fleet.

"We share the company's enthusiasm for the added revenue this aircraft can provide," said Carl Kuwitzky, president of the Southwest Airlines Pilots' Association. "This allows our pilots to take a leadership role in tying our pay to the company's profitability and investing in our future."

The tentative agreement, which goes to SWAPA members for a vote next month, would pay Southwest pilots the same rate for the Boeing 737-800 as for the Boeing 737-500s, which have 122 seats, or the 737-300s and 737-700s, which have 137 seats.

Southwest pilots, already scheduled to get a 2 percent increase in pay rates in 2011, would be able to earn profitability-based raises in 2011 and 2012 under the new agreement.

The deal would extend the current SWAPA contract a year to Aug. 31, 2012.

Southwest said the tentative agreement doesn't mean that it has decided to buy Boeing 737-800s. But a decision to buy the planes has "moved yet another step closer to reality," Southwest said in its announcement.

The carrier already has a tentative agreement with its flight attendants, represented by the Transport Workers Union, that covers issues raised by adding the larger airplane.

"Today, I want to congratulate both SWAPA and TWU 556 ... for recognizing the potential long-term benefits associated with adding the -800 to our fleet," said Mike Van de Ven, Southwest executive vice president and chief operating officer.

"We are still evaluating the needs for training, scheduling, aircraft configuration and other regulatory considerations, but this is an important step in the due-diligence process."

Southwest said it must decide on the -800 by December to leave time to convert some existing orders for 737-700s to the larger version.

Southwest chairman and chief executive Gary Kelly has said the larger 737-800 is more cost-effective on a seat-mile basis.

So "it makes more of the long-haul routes profitable and therefore viable," he said in a Sept. 29 interview. "With Hawaii as an example, the -700 is just not a competitive airplane to Hawaii, and the -800 is."