Southwest Airlines: Exploding the myth of unions being bad for business.

I’m not sure how I came across it, but I was astonished to learn a few days ago that Southwest is one of the most heavily unionized (if not *the* most heavily unionized) airline in the U.S. The figure I saw quoted was “85% of the workforce is unionized”… a figure confirmed by Southwest on their web site.

Now, normally, I’m not one for quoting corporate executives, but this article by Herb Kelleher (co-founder and Chair of the SWA Board of Directors), is worth quoting for this paragraph alone:

“Many observers of Southwest Airlines assume that our outstanding relationship with our People is due to a non-union work force. Nothing could be further from the truth. As a percentage of total Employees, Southwest is probably the most heavily unionized airline in America. More than 4 out of 5 Employees at Southwest are union members.”

I have to admit, this had been my assumption as well… tells you how easy it is for even media-saavy folks to swallow the implicit anti-union rhetoric that pervades the American media (especially when covering the airline industry).

In case you’ve missed it, Southwest is the one and only major airline that has managed to be consistently profitable over the course of the last few decades. This would seem to indicate that the problems experienced by other airlines are less due to union intransigence over benefits and wages, and more due to management level incompetence.

The example of Southwest would seem to disprove the idea that a unionized workforce is bad for business, and bad for efficiency.

It appears that Henry Harteveldt, principal airline analyst at Forrester Research in San Francisco, agrees, judging by this quote from a recent article:

“What matters is how productive and efficient the airline is,” said Harteveldt. “Southwest Airlines is heavily unionized, so if you have good labor relations and keep things focused, you can run a good airline.”

To top it off, Southwest employees also own about 12% of the company’s stock (and now the flight attendants are being cut in on this deal, through the contract they just negotiated). This doesn’t sound that great, until you realize that employees owned 60% of United Airlines before it went into bankruptcy, but are likely to own squat once/if it comes out of bankruptcy. I’m sure Southwest’s employees are happy to own a smaller chunk of a successful airline–and the rest of the stockholders to continue own a larger chunk, themselves. I’ll bet if you ask the latter whether they think Southwest’s unions have been bad for business, you won’t find many takers.

Thomas Leavitt