Southwest Airlines said yesterday that 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, Reuters reported. Unions represent about 83% of roughly 61,000 Southwest employees. Non-union staff salaries will be cut by 10 percent until Jan. 1, 2022, when they will return to the current level. “Our objectives are to make this quick and simple and avoid furloughs,” Chief Executive Gary Kelly said in an interview. The union representing Southwest pilots said that it had tentatively agreed to meet and discuss cost savings if a second COVID-19 relief package does not pass in Washington. The flight attendants and mechanics unions did not immediately comment. Rivals American Airlines and United Airlines 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. Read more.
In related news, the Federal Aviation Administration aid yesterday it would extend temporary waivers of minimum flight requirements at some major U.S. airports through late March 2021 because of the coronavirus pandemic, Reuters reported. Airlines can lose their slots at congested airports if they do not use them at least 80 percent of the time. The FAA said it would extend the waivers at New York’s John F. Kennedy and LaGuardia airports and Ronald Reagan Washington National Airport that were set to expire in October. At four other U.S. airports where the FAA has a formal schedule-review process - Chicago O’Hare, Newark, New Jersey, Los Angeles and San Francisco - the agency proposes to extend credits to airlines for flights that were canceled due to the coronavirus as though those flights were operated through Dec. 31. Major airline groups cited “historically low levels of bookings, with overall bookings down 82 percent year-on-year for 2020 compared to the outlook for 2019; consumer demand that continues to fall ... and the need for schedule flexibility to support sustainable loads.” Read more.
