Southwest Airlines said on Monday it is asking unions to agree to pay cuts in order to prevent furloughs and layoffs through 2021 as the industry struggles to stem losses from the coronavirus pandemic in the absence of more federal aid.
began furloughing 32,000 employees last week when a ban on job cuts expired without another $25 billion in federal payroll support that airlines have been seeking.
“We would have to wipe out a large swath of salaries, wages and benefits to match the low traffic levels, to have any hope of just breaking even,” Kelly told employees, warning that quarterly losses could be in the billions until a effective vaccine is widely available. If federal aid passes, Southwest would reverse any pay cuts. Without it, cost savings must be in place for all employee groups by Jan. 1, 2021, said Kelly, who is reducing his base salary to zero through the end of 2021 and continuing a 20% cut in senior executives’ pay through next year.
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