18 (The Way Forward, Jody Reven)

Today's SWAPA Number is 18. That's the number of SWAPA presidents that we've had since SWAPA's inception in 1978. So in today's episode, we sat down with SWAPA President, Jody Reven. With the first board meeting of the year in the rear view mirror, and a lot of Company news of late, it's time to look down the road and see what's in store for SWAPA in 2025.

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Transcript

Tony Mulhare:

Today's SWAPA Number is 18. That's the number of SWAPA Presidents that we've had since SWAPA's inception in 1978.

Matt McCants:

So in today's episode, we sat down with SWAPA President, Jody Reven. With the first board meeting of the year in the rear-view mirror and a lot of Company news of late, it's time to look down the road and see what's in store for SWAPA in 2025.

Tony Mulhare:

I'm Tony Mulhare.

Matt McCants:

And I'm Matt McCants.

Tony Mulhare:

And here's our conversation with Jody.

Matt McCants:

Well, Jody, you're no stranger to this studio, but it probably feels a little different this time around as president than as the NC Chair.

Jody Reven:

Yeah, sure. I feel like I had a big involvement in that type of thing in strategic messaging. I was talking to one of the board members and he was saying, "Yeah, well this isn't negotiations. This is a different thing. This is running an organization." And what I said to him respectfully is it's all negotiations. It is definitely a different outcome though when I go from caring about a team of 15 or so and making sure that they're all provided for, to a team of over, soon to be, 50 staff-plus, and then all the pilots we have involved too. So just a little more gravity in it, but similar.

Matt McCants:

Okay, let's start internally with SWAPA. And we always have a lot of business, but it starts with what our objectives are for the year because how we conduct all those different operations comes back to how they align with those objectives. So what are we trying to accomplish in 2025?

Jody Reven:

Man, busy year, there's a lot going on. Obviously about a week ago, we signed the final lease for the Williams Square, figuring out the move, the logistics, the contractors, all those type of things to get our staff out of Empire Central, which has become a degraded area and not some place that I want them to come to work at or feel like is necessarily even a safe place for them to work at anymore. So the building, obviously that was part of the big budgeting process and the membership voted on, and Hank Ketchum, absolute essential in that, the business mind of Hank Ketchum, if you haven't had an opportunity to be around him, very impressive, and he's done the lion's share of the work on that. Then the main blocking and tackling and the strategic planning, we had been part of this process where Mike Panebianco did most of the legwork in getting us all together in a room with every single committee chair, identified strengths and weaknesses, the challenges for building benches, industry challenges going forward and put together the workings of the strategic plan.

So now we're unpacking all that. We're bringing in folks for interviews. You guys have probably seen all calls and we had over 70 people for the contract admin position. That's narrowed down to, I'm told, about five, so we should know this week or the next. Two folks are on that committee, and Mike is going to go out and fly the line for a while, well deserved. And then just our engagement in DC the week of 11th, on out to DC with GAC to meet with multiple different folks including the FAA flight surgeon, we'll be talking mental health, we'll be talking about deferrals versus denials and medicals, special issuance, all those type of things to further the careers and interests and preserve the careers and interests of our pilots. And then just maintain the blocking and tackling that we do every day of negotiate a contract, defend a contract, represent our pilots with management, and then this lion's share, this amazing communications that we do week-in and week-out with the pilot group and external sources.

Matt McCants:

I think implementation has a big lift this year, right? And so there's a lot of scheduling touches. So the SAC has a big integration piece.

Jody Reven:

Great point, and I'd be remiss if I didn't mention those guys. I just spoke with them about 10 minutes ago. They just came back from a planning meeting and an implementation meeting, some really Gucci stuff coming at the end of this month and this quarter. They were at the release to check in, reserve, release, check in training. What a great collaborative environment we have right now where they're literally under the hood with the Company turning wrenches on this coding and how we're going to show the platform to the pilot group, what his user experience is going to be, how reserve proffering is going to fit into the open time system, so exciting stuff with that. And training bid, that looks like a promising platform as well.

Tony Mulhare:

So Jody, that's a pretty busy year that we've got for 2025, but let's now broaden our horizon and look at the next round of negotiations, which is what, just over two years away. What are we doing as an organization now to prepare for that and where do you want to take the pilot group over the next few years to be ready?

Jody Reven:

Right now, the best thing that we are doing present day is helping our peers to prepare for pattern bargaining, explaining some of the things that are different in our contract than are in their contracts so that they'll actually go out and raise their side of the tent. Some for instances would be the TFP formula, stackable overrides as opposed to being absorbed, things like our actual conversion rates and how those conversion rates apply. Our other carriers get paid differently when they fly into the wind than with the wind. So just making folks aware and keeping that outreach with our peers and cooperating with data.

So that's the short term, kind of the midterm as we've started identifying what our bench is going to look like. In my vision, I would probably find someone that's either a current board member or a past board member. If you remember, that's how I got my start on the negotiating committee. Somebody that can travel with the team, keep them in line with polling, keep their communications going back and forth with the board, kind of be that conduit to the board of directors. And then Damian Jennette will probably transfer out and he'll continue to help some with 401(k) and that type of thing. But I doubt that he or Kurt or myself will plan to travel this next go around or be part of that. So we've started trying to identify some candidates in the not so distant future loop. You'll see an all call for that, you'll see what kind of talent we have. This time, we'll definitely take one of our attorneys with us.

I plan to send them all through the Harvard course, perhaps that was a fantastic course that many of us have gotten to do under that backdrop too. Then we'll start a limited SEP process. It won't be as robust as the last time because frankly we got the rewrite. We kind of reinvented ourselves with what the pilot group asked. So we'll be looking to fine-tune those asks, what did you like, what's working well, what's not working well? And then this next argument should be more about economic forces and money. So don't see it as challenging in this next go around, but doesn't mean it's not absolutely just as important as the rewrite was.

Tony Mulhare:

So talk a little bit about the strategic plan going forward as far as continuing to build pilot unity. It was pretty apparent to me as a new hire in 2017 as we led into contract 2020 that there was a lot that we were asking for. There was a lot on the table and that was a pretty easy rallying cry. How do you see that movement going forward into what will be contract 2028?

Jody Reven:

So I think the biggest thing is maintaining our credibility with the pilot group. I don't think it's as hard as some people think. And the reason I say that is because we committed to do a thing, we did that thing, we honored the pilots' wishes and we continue to do that. And so as long as we continue to show a credible organization that puts the pilots' wishes and the pilots' guidance first over pet projects or things like that, I don't see that as a problem here at SWAPA. We have to stay ourselves evolving and lean and bringing on new talent, building our benches. That's one of the criticisms we had I thought was kind of funny in the election process. It was like, "You got the same eight guys at SWAPA," and that's true, there's corporate knowledge that's absolutely essential, you don't want to ever lose continuity. But also folks just get worn out, folks get worn out, burned out, want to go back and fly the line, and so we have to be investing in that younger group.

I'd also point out Tony, that the will of the pilot group literally changes before our eyes over time. We've got much younger pilot group now that may have different interests. We have kind of a stall here in hiring for a bit. So that kind of changes how folks view things and so that next round of polling will be essential to see where we're at.

Matt McCants:

Yeah, I think that's important to point out that our touchpoints, whether they're done electronically through SEP or boots-on-the-ground kind of thing, we're always trying to maintain the interests of all the pilot group and we have to pay attention to how those things change as we move along. And related here to contract protection and what we've negotiated, one of the Company revenue initiatives is adding some partnerships and you're a bit of a Section 1 guru. So can you walk the membership through what scope is broadly and how we've maintained our scope strength despite this coming our way?

Jody Reven:

Yeah, absolutely. It's a great topic. We talk about this at the conferences as well because there's some misconceptions. People use scope and partnerships interchangeably. The number one part of our Section 1, our CBA scope has to do with who can fly our passengers, who's allowed to fly our passengers. And we're proud of our Section 1 language. We have 0.0% scope. We don't have RJs, we don't have smaller carriers flying our passengers. Section 1 clearly says that flying for the Company is solely done by pilots on our master seniority list. Partnerships, however, it's something that our Section 1 is unique in that the primary goal is to grow our feed and membership, our seniority list. And so we've been able to negotiate our CBA as such that once a partner, somebody that has either a code share or an interline grows to a certain level, so a couple of aircraft going one direction, a few aircraft going the other direction on the international, we have to serve that market.

Down in South America, there's smaller number of PPDEWs, Passengers Daily Each Way, of 75. So we dip our toe into a market, see if it's profitable for us, if it's something we want to do or not, or if we would just want to just keep taking that passenger feed and then allow us to expand. The Company's been slow to capitalize on that. CapEx dollars weren't spent necessarily where they should have been because we were very fixated and full-forward on Hawaii and preparing for that other stuff. That's a thing of the past. The Company is catching up quickly with the partnership with Icelandair and capitalizing on some of that feed. They're looking at other partners. There's a bit of a buzz around about trying to be first to partner with Southwest.

I heard Hank say a few times we have the best domestic market in history that leads to nowhere, so that's changing. We're starting to pick up some of those partnerships. Also, probably the best thing that we accomplished in those near-international partnerships was the trans-border leg has to be flown by us. So we maintain the passengers on our metal, outside of just the feed that we've allowed to be provided. When we first put that into the contract in 2016, we priced that at about 160 million in potential revenue and those were 2016 dollars. So it's got a lot more potential today and with more modern aircraft that we're bringing on, some of those could lead to us flying those routes. So, very optimistic.

Tony Mulhare:

Jody, we've touched on quite a few subjects, but one of the things that's always hot on and pressing on pilots' minds is what's the status of the MAX 7 certification and where do you see that going this year, maybe next?

Jody Reven:

It appears currently that the Company is married to the MAX 7 plan for now. What I would say though is that I believe they are smart enough and talented enough to pivot, should they need to, and start looking at a possible another airframe.

Tony Mulhare:

Jody, another negotiation to touch that's probably worth mentioning too, since we've got a side letter in the works and some grievances in the queue, I think the membership is getting over some of the hangovers from previous experiences, but how can we rehash how we approach new agreements? And the ink wasn't even dry last year On the new CBA and because of some of the cleaning up of the language, we had to engage in a side letter 1. So how do you see this side letter 2 going and what would you say to people that think side letters are concessionary in nature?

Jody Reven:

Yeah, just show me the concession, I guess. This is not that SWAPA, and I think the hangover comes from when we agreed before you and I were ever involved in the pilot union, but we were young pups of the Company and we agreed to fly in the 800 for no additional benefit to the pilot group, and that has kind of stuck with folks and stuck in their crawl, including mine, that we agreed to something that was beneficial to the Company and aircraft with more stage engage revenue production, but we did not glean anything for that. So it wasn't really partnering.

So I think that it's been loud and clear both at the SWAPA and Company side that that is our thought process moving forward and that's actually been mutually beneficial to both the pilot group and the Company and that's okay. Side letter 2, in its current state is really just more cleanup, more cleanup of intent, making something read clearer. When you have a rewrite to this extent, you're going to have things that, "Ah, you know what, I wish I would've worded it this way. We should have put a will there instead of a may," et cetera. So if we can take something off the negotiating table, that's one thing. For instance, if we accomplish a sick leave buyback and it's off-cycle and it's for something that's mutually beneficial to the Company, why would we not entertain that? If you could put your sick leave at retirement into your market-based cash balance plan, is there anybody that would be against that? Of course, not.

So I think you have to take them as they come and I would say just bear with us. The board of directors has the ultimate hammer. They get to look at it and decide if it's concessionary or if it's something they should entertain. Then if it has to do with rates of pay or work roll minimums or seniority, then the pilot group will get to vote on it themselves.

Matt McCants:

Yeah, there are always triggers that will set off something that the membership needs to vote on and those are in black and white. We've said this before, but we'll say it again, one of the things with these agreements, new agreements is that we're getting back to what we wanted to accomplish in contract 2020, which is that language matches intent and vice versa. Because when they don't, we're just in this back and forth and we're kind of treading water and that seems like where another part of side letter 2 comes into play is we're making sure that the language matches the intent, the intent match the language, and it's being practiced that way. And that'll cut down on questions that contract admin and SAC are fielding, correct?

Jody Reven:

A hundred percent. It helps everybody. The rewrite is accomplishing what was intended. We're looking at the clear language, the clear intent. One side or the other may be kind of frustrated about how it happened. Take that back to the reason behind continuing to refine language when you get a bite at it. So if you say, "Hey, we're going to do a side letter 2 and clear up a few things," there's no reason to rush.

Tony Mulhare:

Jody, would you point to how the language cleanup, which was a huge point in contract 2020 in the data that backs that up with some of the data that was presented at the board of directors' meeting about the number of grievances in the first year after contract 2012 versus the number of grievances in this first year after contract 2020?

Jody Reven:

Yeah, we had gotten up to shortly before, I might answer just a little differently, but we'd gotten up to, shortly before the contract, 150-plus grievances and we barely hit double digits and will probably settle two or three in the next two weeks. So things are going fairly well and we're not having a lot of disagreements, really happy with the folks that are in the joint implementation committee. Many of those people were in the room when something was actually negotiated, and so then contract admin and Kudish and those guys are in there as well. And so they'll bring up the issue there first. And a lot of things are getting resolved in that room because both sides were actually there.

And if it's something they really just can't settle on there, they push it off into an issues meeting. And 90% of our issues that our contract admin staff bring to either payroll or the Company get resolved on the spot at the lowest common denominator, which was our intent all along. And so it's working, I guess is the best way that I can say it. There's more collaboration than I've seen at my time at SWAPA and there's less disagreements.

Matt McCants:

All right. Let's pivot to the Company now. You mentioned this a little bit earlier and obviously, last week was a tough one with a lot of employees being laid off in various departments. We'll get into more of that, but how would we characterize our relationships with the airline right now in your initial conversations with them, including this most recent news?

Jody Reven:

I guess if I was going to use a word right now, I would use collaborative. That's going on still, we're cautiously optimistic that we can maintain that. Even today with news outlets still clawing at, trying to get the names from the pilots on 2504, it's very tempting. They just want to do a nice piece to talk about how things are. We have concerns on the process though, and we have to maintain the anonymity of our pilots as they request for us to do so. And the Company has been very helpful with that, all the way up from Bob Jordan all the way down to Steve Christl, Lee Kinnebrew, and even the chief pilots, the local chief pilots. So I'm cautiously optimistic about our level of collaboration.

Last week we brought up in a meeting that they were about to do something with their reorganization that was in conflict with the contract. And within about 24 hours, I mean this is a big move, this is moving departments under somebody else, and in about 24 hours I got a message from Steve Christl, and he said, "Hey, we're just going to hit the brakes on that. We need to make sure we bring the right folks into the room. And my apologies, we didn't do that. We're going to get that done." So to me, the biggest hits that I heard in the past or the biggest complaints were not only disagreements but responsiveness. So it'd be a week or so or longer, and then we'd have to keep knocking on the door. And what I've witnessed so far is collaboration and mutual respect and responsiveness, and that was the end goal all along.

Matt McCants:

Well, that sounds like there's some bridges being built. Are there any places where we're kind of stuck or where our ideas and priorities are different?

Jody Reven:

Yeah, I think sometimes in the realm of discipline and how things are handled and who gets involved and when, that we're still working through some rough edges and we'll continue to do so, but I have every indication so far that we're going to have a willing partner and that we're going to be able to iron those out. And then as we don't, we can still respectfully disagree and show up in the lowest common denominator, show up in a grievance in the worst case in a courtroom, but hopefully we can avoid both of those with a continued collaboration and responsiveness.

Tony Mulhare:

Jody, about seven to eight months ago, the activist campaign from the Elliott Investment Management Group began and during that time, SWAPA was able to have some conversations with them. Have those conversations with Elliott continued or have we shifted to merely talking to the new Southwest Airlines' board of directors?

Jody Reven:

A little bit. I just reached out to them this week as a matter of fact, after the 1,750 layoffs and that type of thing and the 19% stake change and just kind of touch a base with them, but it's not nearly as robust as it was when we were making introductions and they were seeking our buy-in and introducing us to the new board members. I do want to extend that invitation and I plan on reaching out to the new slate that actually made it onto the board again, 'cause we were able to meet with them once before and a lot of the priority things that they discussed, I can see coming to fruition. But we do need to keep those lines of communication open. One of the things the Elliott guys seemed surprised about was that we had never really had contact with our current board of directors and they committed that that would change. So we're going to do our best to hold them to that.

Tony Mulhare:

So along the lines that you were just discussing as far as cooperation with the Company, we had Bob Jordan, Andrew Watterson, and Justin Jones in the building during the last board of directors' meeting. And I think it's safe to say that the Company is going through some serious pressure to return to at least the financial strengths that it once had. What's the pilot group's role in that or are we just kind of on the sidelines and reacting to whatever the Company does?

Jody Reven:

I think our role is pretty cemented in that we day-in, day-out, 4,000 flights a day, make it look easy and continue operating efficiently and safely and professionally. And we do see that they are trimming costs. We do see that our load factors are going up. We see the addition of red eyes and it looks like the finances are kind of on the rise and things are turning positive. So I think basically just keeping up and staying true to who we are, being the efficient pilots that we are, making the safe calls, as in 2504, continuing the tremendous pilot monitoring and pilot flying skills that we're known for. And then I think there's good things coming, talking to the training folks too, to try to identify things that can make us even more safe. So stay in the books, stay respectful to each other out there culturally, and I know that we'll continue to improve and be professional.

Tony Mulhare:

Speaking about pilot culture for a second. There's a lot of concern with this 1,750 layoffs about the Company culture moving in a vastly different direction. But talk about what we can do as a pilot group to retain that Company culture that Southwest was known for for five decades.

Jody Reven:

I think it's important, and I think we're doing it as I'm out there flying in the back of airplanes, occasionally getting to flying in the front of one. I think our pilots and our flight attendants and our ops agents and our gate agents have maintained courtesy and a fun-loving job and a professional job, still continue to take care of each other out there and treat people with respect and dignity, and take care of the folks when we have rough rides, take care of the flight attendants, make sure that they're provided for on the overnights with safe vans and those type of things that we're doing day-in and day-out. And then I try to tell pilots this, "Let's stay off of the politics on the crew van. Let's avoid the religious discussions and just keep it light, keep it fun. This is not where you kick your feet up and have political arguments. You've got too important a career and too promising a career to risk any of that type stuff. Just keep it light, keep it fun, and keep it professional out there."

Matt McCants:

Yeah, I agree. And I think those are good things for the pilot group to keep in mind when you're on the line. Here at SWAPA, while the Company is going through all this churn, hey, we're still focused on defending the CBA, correct?

Jody Reven:

A hundred percent. That's one of our core functions. I always say, according to me you have four pillars here at a union. Negotiate a contract, defend that contract, represent your pilots with management, and communicate. And I lump a lot of things under communication. So in fairness, we're communicating with the Hill, we're communicating with our peers, we're communicating and advocating with Main Street, Wall Street, you name it. But that's my way of kind of lumping it into four pillars of what a union does. And we're probably firing on all cylinders. Our financial health is better than it's ever been. We're getting out of Empire Central, getting out of the real estate business, going over to a more professional building and making good responsible decisions on behalf of the pilot group at 1% dues. And the service that we're providing in benefits and advocacy is second to none. And I've been to conventions at APA and ALPA just within the last year and so, really proud of where we're at.

Matt McCants:

So with those four pillars here, SWAPA has our eyes on all the different things that are happening with the Company. They're going to do what they have to do in their eyes, but specifically with any changes, and we know there's some big ones coming, assigned seating, they're kind of optimizing the network in a different way, but the SAC shows that we're appropriately manned for the schedule they want to fly. So we're not really expecting anything on that front, right?

Jody Reven:

That's the truth. This is going to sound depressing, but I had a young man that's 30, one of our first officers that's been here for about a year, sent me a long e-mail, long concerning e-mail. So it was too long an e-mail, I just picked up the phone and called him, there was too much to cover. And so we talked about it. He's basically saying, "Hey, I need to know what I should be doing in preparation for my family here. I'm hearing rumors about M&A. I'm worried about my job, my position on the seniority list." And so we talked a good deal about it, and I have a really bright outlook of that 30-year-old on the bottom of the seniority lists future, his 401(k) is going to be worth twice what mine is. And that's just a minor issue. I see a lot of opportunity with our network.

Even if there was some sort of M&A in the future, that's a 24-month decision, not a tomorrow decision as we figure out what seniority lists look like, as we figure out what aircraft we're keeping, what aircraft we're not keeping, what kind of overlap they would have. I don't see it as a negative as much as I once would have.

Tony Mulhare:

All right, Jody. So let's wrap up today's discussion with a couple of comments on where you see the organization moving forward and not just moving forward, but forward with a purpose.

Jody Reven:

As always, our focus is to not only represent but be the safest, most efficient and profitable pilots in the industry. And I don't just mean profitable for the Company, but I mean profitable for each one of our pilots' bottoms lines. We're finally getting there. We're finally realizing, I think, as a Company that as the most efficient and productive pilot group in the world, we should be paid as such. And I think we've realized that, now we have to maintain that moving forward. And in order to do that and justify that, we have to show both our management and the shareholders and the traveling public that we're just that, the safest, most efficient and most professional.

Tony Mulhare:

We'd like to thank Jody for sitting down with us today for a sort of State of the Union here at SWAPA. If you have any suggestions for upcoming podcasts or any feedback you'd like to share, please drop us a line at comm@swapa.org. We welcome any comments or recommendations.

Matt McCants:

Finally, today's bonus number is 44, which is the number of professional staffers at SWAPA. They, along with your committee pilots and reps, shoulder the daily business at the organization. With those four pillars that Jody spoke of in mind, they're ready for whatever 2025 has to throw at the pilots of Southwest Airlines.