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Southwest Chief Executive Says Furloughs, Pay Cuts Not Needed Through End of 2021

Southwest Chief Executive Says Furloughs, Pay Cuts Not Needed Through End of 2021

Southwest Airlines chief executive Gary Kelly says a massive $15 billion extension of federal payroll support for aviation workers will help the airline avoid involuntary furloughs and pay cuts through the end of 2021. The upbeat assessment came despite the fact that the federal funding extension will only last through to the end of March 2021 and other carriers like American and United may need to re-furlough thousands of employees at that point.

With the extension of the payroll support program, or PSP, Kelly said Southwest was now “halting all efforts to furlough or reduce employees’ pay, and officially rescinding the WARN notices, furlough notices, notices of potential impact, and notices of pay reduction for Noncontract employees that were previously sent.”

Southwest had managed to avoid involuntary furloughs at the end of September when the initial wave of PSP funding dried up but had warned workers that concessions in the form of sweeping pay cuts would be required to prevent the threat of furloughs in the months ahead.

Unions representing various employee groups including flight attendant and mechanics had resisted the pay cut proposals putting the airline on a collision course to enact the first involuntary furloughs in the company’s history.

In early December, Southwest sent out official WARN notices to more than 6,800 employees. Affected employees included more than 1,200 pilots, around 1,500 flight attendants, 1,110 customer service staff, as well as 2,500 ramp, cargo and other operations staff. 

The furloughs would have gone ahead between March 15 and April 1, 2021.

Kelly said the extension of PSP was always the airline’s “preferred plan” and that “it means we can stop the movement toward furloughs and pay cuts that we previously announced. For that, I am most grateful.”

“The new law will provide payroll support for all Southwest Employees through March 31, 2021. Given this, we currently do not anticipate the need to conduct any furloughs or pay cuts next year,” Kelly said in a memo sent to Southwest staffers on Monday.

“This pandemic and its impact on the world, our country, and our industry have required Southwest to move toward actions that we’ve never even considered before in order to save our Company,” the memo continued. “And, thankfully, as a result of this crucial aid, we can breathe a sigh of relief, knowing that we will not be forced to follow through with those steps that are so foreign to all of us.”

On Sunday, more than 1.28 million passengers passed through TSA security checkpoints at airports across the United States. It was the highest passenger throughput since the start of the pandemic but that number is still down by over 50 per cent compared to the same day in 2019.

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