Southwest warns of first round of airline days off amid pandemic – AirlineGeeks.com
By Jace Moseley
Southwest warns of first round of airline days off amid pandemic
While the demand for travel continues to slowly increase around the world, things are not all positive in the airline industry. Dallas-based Southwest Airlines faces the possibility of having to take time off unless passenger numbers change dramatically.
While the exact number of possible layoffs has not been announced, these are believed to be the first involuntary layoffs in the company’s history. To avoid these layoffs, Southwest CEO Gary Kelly said passenger numbers are expected to triple by the end of the year, according to Reuters. While not specifically for Southwest Airlines, the TSA screened just under 750,000 passengers on June 12. This number is 71.8% lower than on the same day last year.
Increase in COVID-19 cases in major southwestern cities
Many states in which the Southwest is heavily present have recently seen spikes in new cases, including Florida and Texas. In a letter to employees, Kelly said: “We are still overstaffed and COVID cases continue to increase.”
Kelly also said that travel restrictions in some states linked to new cases “are not positive developments for our business, and we are concerned about the impact on already low travel demand.”
Southwest’s layoff warnings come a week after United Airlines sent leave warnings to nearly 36,000 employees. American Airlines, based in Texas, said it would have nearly 20,000 surplus employees.
The airline offers voluntary leave packages that include early separation and long-term leave. Carrier employees will have until July 15 to request any vacation package they wish to take. Kelly said time off was the last choice, saying, “While time off and layoffs remain our very last resort, we cannot rule them out as a possibility in this very bad environment.”
US airlines are not allowed to make layoffs until at least October 1, following the provision of the CARES Act passed by Congress. Southwest received $ 3.2 billion to cover wage costs during the pandemic also has the option of taking out another loan if it wishes. The $ 2.7 billion loan is already accepted by the US Treasury and just needs to be accepted by the airline if it wants to take it.
Due to Southwest’s point-to-point route structure, it flew a significantly higher percentage of its regular schedule than other airlines during the pandemic. While traditional hub-and-spoke carriers have been able to drastically reduce flights using their hubs, the carrier has not had that same luxury. Southwest will operate only 32% fewer flights in July compared to last year and operated nearly 38% of its regular schedule in May.