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Southwest Considers Layoffs as Government Support Fails to Materialize

Southwest Considers Layoffs as Government Support Fails to Materialize
Joe Cortez

Even though the Dallas-based airline has been able to resist layoffs, Southwest Airlines is now warning their unions that layoff notices could be coming. The airline is reportedly asking unionized employees to take a pay cut of 10 percent, as a measure to keep everyone on the payroll.

Furloughs could soon be coming for Southwest Airlines employees, if they do not reportedly agree to take a pay cut when 2021 begins.  The Dallas Business Journal reports the carrier is asking unionized workers to consider the cuts, as the COVID-19 pandemic continues to keep flyers at home.

Southwest Employment Plans Predicated on Additional Government Support

At the end of the CARES Act Payroll Support Program funding, American Airlines and United Airlines both initiated their furlough plans, cutting thousands of workers from their ranks. However, Southwest resisted the move, instead electing to make cuts at the executive level to prevent job losses.

In their third quarter 2020 report, the airline announced their plan was predicated on additional funding from Congress in a phase four support bill. With that bill now completely stalled ahead of Election Day 2020, the airline is asking their organized labor to consider making sacrifices to preserve jobs.

According to the report, Southwest is asking employees to take a 10 percent pay reduction, but the reports do not say for how long. The carrier has not publicly commented on the negotiation reports. Even if all the unionized employees agree to it, they are concerned the carrier will still send furlough notices, as required by the Worker Adjustment and Retraining Notification (WARN) Act.

“Your negotiating team believes that the company will continue through the process of issuing notices of potential furloughs as required by the WARN Act, ” read a notice to TWU Local 556 members, according to the Dallas Business Journal. “Even if those notices are not followed by furloughs.”

As it stands today, the unions are not taking kindly to the requests. According to statements by the respective organizers, they are frustrated that these requests are solely based around if Southwest will receive additional federal support funds.

“We have and will continue to offer solutions that will realize even more cost savings moving forward, ” a statement from the Southwest Airlines Pilots’ Association (SWAPA) reads. “It’s difficult to fathom how continued waste becomes acceptable when a ransom is being demanded and threats to our Pilots’ livelihoods are the consequences, especially at the LUV airline.”

Airlines Continue to Demand Payroll Support from Washington

Even though airline loads are starting to slowly increase, the carriers say as the COVID-19 pandemic continues, there is not enough traffic to keep the airlines profitable and keep all staff members employed. After American Airlines, Delta Air Lines, Southwest and United Airlines all posted significant losses for the third quarter, they are all hopeful that the election will bring forward a new payroll support bill.

Until then, the carriers say they will get creative about maintaining liquidity. After reporting their loss, JetBlue says they are considering following the lead of the legacy carriers and securing a loan against their frequent flyer program.

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