Southwest Airlines warns of pay cuts
Southwest Airlines is warning its workforce that pay and benefits may need to be revised to save jobs at the airline.
CEO Gary Kelly gave a downbeat assessment of the short term future with a forecast it will lose than $1 billion in revenue in April due to the Covid-19 downturn.
"If things don’t change dramatically over the May-June-July time periods, we’ll have to prepare ourselves for a drastically smaller airline," Kelly said.
That could mean a much smaller workforce unless unions agree to pay cuts.
"Life can be very humbling and as I’ve said several times, we’ll have to be prepared for every possible scenario."
"Our traffic is virtually zero," Kelly said.
Southwest hasn’t cut capacity as much as some of its rivals but still has ‘hundreds of planes’ grounded.
Southwest was granted $3.29 billion in federal grants and loans from the government which guarantees jobs until September.
Beyond that, he gave no assurances.
"We’ll likely have to make sacrifices to survive this. The imperative here is to survive. Many companies will not survive this and it may be through no fault of their own. But Southwest is too precious to lose," Kelly said.
"To preserve precious jobs of our coworkers, our friends, our family, I would prefer we all take a small and hopefully temporary pay cut," he said.
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