Southwest Airlines rolls back planned furloughs, pay cuts after COVID-19 relief bill signed
American and United are also working to bring back 32,000 employees
Southwest Airlines no longer anticipates conducting any furloughs or pay cuts for thousands of workers in 2021, CEO Gary Kelly told employees Monday.
Kelly's announcement came just 24 hours after President Trump signed the $900 billion relief package which is slated to infuse airlines with $15 billion to keep all their employees on the payroll through March 31.
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Given this, the airline does not "anticipate the need" to take those drastic steps, Kelly said. Although, he cautioned that the airline is still overstaffed "in many areas" and appealed to employees to consider voluntary time off.
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The airline – which had never laid off a worker in its 49-year history – cautioned just weeks ago that nearly 7,000 workers were in danger of losing their jobs as soon as March or April if their unions did not accept pay cuts of about 10%.
Prior to that, both Southwest and Delta were able to avoid furloughs throughout the pandemic by convincing thousands of workers to take voluntary buyouts or early retirement and, in the case of Delta, negotiating contract concessions from pilots.
SOUTHWEST AIRLINES NOTIFIES NEARLY 7,000 EMPLOYEES THAT THEY MAY BE FURLOUGHED
"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 a note to employees.
Because of this "crucial aid," Kelly said the airline "can breathe a sigh of relief, knowing that we will not be forced to follow through with those steps that are so foreign to all of us."
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Airlines – which have been heavily battered by the drop in travel demand since the onset of the pandemic – have been pleading to Congress for additional aid after receiving funds earlier this year.
In March, as the pandemic caused a nosedive in travel, airlines received the first round of taxpayer assistance – up to $25 billion to cover payrolls for six months, and another $25 billion in low-interest loans. Some airlines turned down the government loans.
American and United Airlines, which together furloughed 32,000 employees in October, had said they would bring those workers back temporarily if the latest coronavirus aid package was signed.
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Earlier this month, United CEO Scott Kirby and President Brett Hart said in a memo to employees that the airline "intends to offer temporary employment" to more than 13,000 employees who were furloughed in October.
United confirmed to FOX Business that the airline is already working to bring its furloughed employees back and expects to send recall letters to its employees in early January.
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"As you know, involuntary furloughs were always a last resort for us and we worked really hard over the summer – through cost-cutting, capital-raising, and partnering with our unions – to make the number of people who were ultimately impacted as small as possible," Kirby said last week.
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Likewise, American Airlines CEO Doug Parker and President Robert Isom said in a memo to employees that the airline will begin recalling its nearly 19,000 furloughed employees in phases. Once officially approved, all furloughed team members will have pay and benefits restored retroactively to Dec. 1.
American also intends to soon restore flights to smaller cities that were dropped this fall after a federal requirement to maintain those flights expired.
The Associated Press contributed to this report.