Southwest Airlines 2012 Annual Report Download - page 15

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Association (“AMFA”), and the Aircraft Mechanics and Inspectors at AirTran, represented by the
International Brotherhood of Teamsters, Local 528 (“IBT 528”), voted to ratify their Seniority
Integration Agreement, which integrates the two groups’ seniority lists. Further, the International
Association of Machinists and Aerospace Workers, AFL-CIO (“IAM 142”), which represents the
Customer Service Agents and Customer Representatives at both Southwest and AirTran, reached a
decision regarding the methodology for integrating the seniority lists of the two workgroups. The
decision by IAM 142 was not subject to a vote by the respective workgroups. In addition, a
settlement agreement was reached for integrating the seniority lists of Material Specialists at
Southwest and AirTran. As a result of these agreements, all Southwest and AirTran union workgroup
seniority integration methodologies have now been resolved. The Company’s Pilots, Flight
Attendants, Flight Instructors, Dispatchers, and Ramp, Operations, Provisioning, and Freight Agents
have also successfully completed the seniority integration negotiation process.
During 2013, the Company expects to:
• continue to produce significant Southwest network growth through the multi-year conversion of
AirTran’s 737-700 fleet, products, gates, and services to Southwest’s look;
• continue to transfer AirTran Employees to Southwest, including the complete transfer of all
remaining departments, with the exception of Flight Crews, whose transition is aligned with aircraft
conversion;
• deploy connecting capabilities between the Southwest and AirTran networks to allow Customers of
both Southwest and AirTran to book connecting itineraries between the two carriers; and
• continue to further optimize and align the Southwest and AirTran networks, which is expected to be
a multi-year undertaking.
The Company believes the acquisition of AirTran has positioned it to better respond to the economic and
competitive challenges of the industry because:
• it grows the Company’s presence in key markets, many of which Southwest did not previously serve,
and represents a significant step toward positioning the Company for future growth;
• it allows the Company to offer 25 more destinations by extending its network and diversifying into
new markets, including significant opportunities to and from Atlanta, the largest domestic market
Southwest previously did not serve;
• it expands the Company’s presence in slot-controlled markets where Southwest previously had little
(New York LaGuardia) or no (Ronald Reagan Washington National Airport) service;
• it expands the Company’s service in other key domestic markets, including Baltimore, Milwaukee,
and Orlando and adds destinations to its route system;
• it increases the Company’s share of current domestic market share (as measured by available seat
miles or passengers); and
• it provides access to near-international leisure markets in the Caribbean and Mexico, as well as
smaller cities, and provides firsthand and meaningful insight into these new expansion opportunities.
Southwest’s All-New Rapid Rewards Frequent Flyer Program
In March 2011, Southwest launched its All-New Rapid Rewards frequent flyer program. Under the current
program, members earn points for every dollar spent, whereas, under the prior program members earned credits
for flight segments flown. The amount of points earned under the current program is based on the fare and fare
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