Southwest Airlines won't need furloughs, wage cut
Southwest Airlines will drop wage cut demands and rescind furlough notices after President Donald Trump signed the $900 billion economic stimulus bill that included $15 billion in aid for airlines, the company said in a letter to employees Sunday evening.
The new funding and pandemic relief bill will require airlines to protect jobs and wages through March 31, 2021, but CEO Gary Kelly of Dallas-based Southwest Airlines said the company won’t likely need to force any employee cuts for the entirety of 2021.
“As I’ve been saying for months, this was always our preferred plan, and it means we can stop the movement toward furloughs and pay cuts that we previously announced,” Kelly said in the letter to workers. “Given this, we currently do not anticipate the need to conduct any furloughs or pay cuts next year.”
Southwest is in line for about $1.5 billion in grants and $650 million in stock-backed Treasury loans through the new stimulus bill.
Southwest executives told employees in late September that it would need across-the-board 10% wage cuts in 2021 in order to keep the company on solid financial ground. The company cut non-union pay for 2021 and sought wage cuts from union workers too, but talks with unions faltered and the company issued furlough notices for more than 7,000 employees in early December.
Airlines are still anticipating a tough few months ahead until a COVID-19 vaccine reaches a wide enough audience to reduce the risk of the virus spreading. Kelly has said he doesn’t anticipate a significant recovery in passenger traffic until late 2021 with a full recovery likely taking longer.
Southwest Airlines didn’t furlough or cut wages for any workers in 2020 even during the worst of the COVID-19 pandemic that decimated air travel.
