Airline Pilot Central Forums - SWA Won't Need Furloughs This Year

Southwest Airlines won’t need to furlough employees this year after getting nearly 17,000 workers to take early retirement and extended leave, even after reporting a $915 million loss from the COVID-19 pandemic, the company said Thursday.

Dallas-based Southwest, which warned that air travel won’t recover until a COVID-19 vaccine or therapy is developed, said that it will save about $400 million in the fourth quarter from employees opting out of working.

The news came as Southwest reported an 83% drop in revenue for the second quarter and that it burned $23 million a day in costs.

“For those employees that elected these programs, I am immensely grateful for their outstanding support of and service to our great Company,” said CEO Gary Kelly in a statement. “Based on the strong take rates from these voluntary programs, currently, we do not intend to pursue furloughs and layoffs, or pay and benefits cuts, through yearend; however, we will continue to plan for multiple weak scenarios and maintain our preparedness.”

The carrier said it will still likely have to reduce its flight schedule in the fourth quarter and leaders there have warned that demand has weakened recently with a surge in COVID-19 cases in many parts of the U.S.

Southwest Airlines has about 60,000 employees in the U.S., including 10,000 in Dallas where it has its corporate headquarters.

Southwest has not released figures on how many employees will take leave or buyouts, but the TWU 556 union said about 5,400 flight attendants took one of the programs.

Southwest Airlines, like other airlines, is under pressure to reduce payrolls ahead of Oct. 1, when rules from the CARES Act airline stimulus expires that prohibited layoffs, furloughs and pay cuts. Southwest Airlines took about $2.3 billion in grants from the stimulus and another $1 billion in loans.

It would be a major victory if Southwest didn’t have to require furloughs of staff members. Competitors have already started issuing furlough warnings. Fort Worth-based American issued 28,000 notices to mainline and regional airline employees. Chicago-based United has warned 35,000 employees that they may be at risk for furloughs.

TWU 556 President Lyn Montgomery said a large number of flight attendants took leave because they want to see Southwest navigate through the pandemic.

“For some that have taken the extended leave, they don’t want to fly right now or they have an at-risk family member at home,” Montgomery said. “Some really love Southwest Airlines and wanted to take that personal sacrifice.”

Montgomery said all flight attendants and pilots that applied for leave and buyouts will get their request. However, she said the company is also telling employees they may have to bring them back earlier if demand increases in November or December.

- Source Kyle Arnold at AviationPros citing Dallas Morning News