Southwest Airlines Co. (NYSE: LUV) announced yesterday it will share $586 million through its ProfitSharing Plan with its Employees for 2016—equaling approximately 13.2 percent of each eligible Employee's eligible compensation, or the equivalent of six weeks' pay.
This is Southwest Airlines' 43rd consecutive ProfitSharing award. For the 2016 plan year, Southwest announced a new funding structure that will pay part of the ProfitSharing award to the retirement plan and part in cash. Most employees will receive 10 percent of eligible compensation as a contribution to the ProfitSharing Plan and the remainder—approximately 3.2 percent—in cash, both of which will be paid on April 20, 2017. Some employees will receive the entire ProfitSharing award in the retirement plan as specified in their collective bargaining agreement.
"Our People-first approach, which has guided our Company since it was founded, means when our Company does well, our People do really, really well," said Gary Kelly, Chairman and CEO of Southwest Airlines. "Our People work incredibly hard and deserve to share in Southwest's success."
This $586 million award is equivalent to more than $1.6 million a day and will be funded on April 20, 2017. When this ProfitSharing award is added to the Company's $351 million in Company contributions to Southwest's 401(k) plans for 2016, Southwest will have rewarded Employees with approximately $937 million, $852 million of retirement benefits PLUS a cash payment of $85 million.
Southwest Airlines also invested approximately $746 million in its Employees' other benefits during 2016, including healthcare coverage, and other welfare and wellness programs. In total, that's nearly $1.7 billion dedicated to the wealth and wellbeing of Southwest Employees for 2016 alone, on top of base salaries.
Southwest was the first in the industry to offer a ProfitSharing Plan. Through the ProfitSharing Plan, Southwest Employees currently own more than four percent of the Company's outstanding shares.
ABOUT SOUTHWEST AIRLINES CO.
In its 46th year of service, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other air carriers with exemplary Customer Service delivered by more than 53,000 Employees to more than 100 million Customers annually. Southwest proudly operates a network of 101 destinations in the United States and eight additional countries with more than 3,900 departures a day during peak travel season. Subject to requisite governmental approvals, service to Grand Cayman begins June 4, 2017, the same date service is scheduled to begin from Cincinnati.
Based on the U.S. Department of Transportation's most recent data, Southwest Airlines is the nation's largest carrier in terms of originating domestic passengers boarded. The Company operates the largest fleet of Boeing aircraft in the world, the majority of which are equipped with satellite-based WiFi providing gate-to-gate connectivity. That connectivity enables Customers to use their personal devices to view video on-demand movies and television shows, as well as nearly 20 channels of free, live TV compliments of our valued Partners. Southwest created Transfarency®, a philosophy which treats Customers honestly and fairly, and in which low fares actually stay low. Southwest is the only major U.S. airline to offer bags fly free® to everyone (first and second checked pieces of luggage, size and weight limits apply, some airlines may allow free checked bags on select routes or for qualified circumstances), and there are no change fees, though fare differences might apply. The airline proudly unveiled a bold new look: Heart. A new logo, aircraft livery, interior design featuring a new seat and Flight Attendant galley, Employee-designed uniforms, and an updated airport experience all showcase the dedication of Southwest Employees who connect Customers with what's important in their lives.
From its first flights on June 18, 1971, Southwest Airlines launched an era of unprecedented affordability in air travel described by the U.S. Department of Transportation as "The Southwest Effect," a lowering of fares and increase in passenger traffic whenever the carrier enters new markets. With 44 consecutive years of profitability, Southwest is one of the most honored airlines in the world, known for a triple bottom line approach that contributes to the carrier's performance and productivity, the importance of its People and the communities they serve, and an overall commitment to efficiency and the planet. The 2015 Southwest Airlines One Report™ can be found at SouthwestOneReport.com.
Book Southwest Airlines' low fares online at Southwest.com or by phone at 800-I-FLY-SWA.
SOURCE Southwest Airlines Co.