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Hundreds of Southwest Airlines workers protest at shareholder meeting

Southwest Airlines pilots march outside of a Chicago hotel where the airline held its annual shareholder meeting on Wednesday.
Southwest Airlines pilots march outside of a Chicago hotel where the airline held its annual shareholder meeting on Wednesday.

Hundreds of Southwest Airlines pilots, flight attendants and mechanics picketed outside of the carrier’s annual shareholder meeting Wednesday in Chicago.

The unions were protesting a lack of progress in contract talks with the carrier. Pilots, represented by the Southwest Airlines Pilots’ Association, have been in negotiations since 2012 and have not had a pay raise since 2011.

“When 10 percent of your pilot workforce travels in to protest against their employer’s actions it is a pretty clear sign there is a problem to address,” said SWAPA President Jon Weaks in a statement. “Historically, Southwest Airlines has taken care of employees first, which lead to happy customers and shareholders. The order is now flipped, with employees continually the lowest priority, or perhaps not even a priority at all.”

At the shareholder meeting, which lasted just 15 minutes, Southwest announced a $2 billion share repurchase program and an increase in its quarterly dividend to 10 cents a share, up 33 percent from 7.5 cents.

“2016 represents the best start for Southwest Airlines to a year in over 20 years,” said Southwest’s chief executive Gary Kelly.

The Dallas-based carrier also announced it’s asking for government approval for daily flights from Los Angeles to three Mexico destinations: Cancun, Puerto Vallarta and San Jose del Cabo, Los Cabos.

Earlier this week, the pilots union filed a lawsuit against Southwest, alleging “unfair tactics” during contract talks. The union says Southwest has threatened to operate the new Boeing 737-MAX aircraft in 2017 even if there is no contract with the pilots.

Kelly said Southwest’s growth plans may be jeopardized by the lawsuit.

“It will harm Southwest if we cannot receive future aircraft deliveries,” Kelly told reporters after the meeting. “It won’t put us in jeopardy of shrinking the airline, but we won’t be able to grow.”

Pilots held signs saying “No contract, No MAX” as they walked in a quiet line outside of the Chicago hotel where the shareholder meeting was held.

Craig Drew, Southwest’s senior vice president of air operations, said the company wants to reach a new contract with pilots that can be ratified.

“While I share their passion for obtaining a new collective bargaining agreement, today’s demonstration will not alter our approach,” Drew said.

The pilots were joined by members of the flight attendants union and the mechanics union during the protest.

The carrier is in contract talks with several labor groups. In 2015, it reached a proposed contract with its flight attendants, but they overwhelmingly rejected the proposal. Its ground workers union narrowly approved a contract in February that gave ramp workers and baggage handlers 20 percent raises over the five-year contract.

This report includes material from Bloomberg News.

Andrea Ahles: 817-390-7631, @Sky_Talk