Southwest warns passenger numbers must triple to prevent layoffs
Southwest Airlines warned employees Monday that passenger numbers need to triple by the end of the year to avoid layoffs.
The airline has never had involuntary job cuts but passenger numbers are down 73 percent from 2019, Bloomberg News reported. It gave employees until Wednesday to apply for voluntary separation or to take extended time off because the company is overstaffed for the existing amount of flights.
“Although furloughs and layoffs remain our very last resort, we can’t rule them out as a possibility obviously in this very bad environment. We need a significant recovery by the end of this year—and that’s roughly triple the number of Passengers from where we are today,” CEO Gary Kelly said in his weekly message to staff on Monday.
In the internal message, obtained by The Hill, Kelly noted that United Airlines has also warned about furloughs. The airline said last week that as many as 36,000 employees, more than one-third of its workforce, could face furloughs on Oct. 1.
Southwest is blocking off all middle seats while other airlines like American and United have been booking flights to capacity amid the coronavirus pandemic.
“The recent rise in COVID cases and increasing regional restrictions on businesses and states requiring quarantine aren’t positive developments for our business, and we are concerned about the impact on already weak travel demand,” Kelly said in the message.
Kelly’s remarks come as cases are surging in states across the country, particularly in the Sun Belt. Florida recorded 15,300 new cases Sunday, setting a single-day record for a state, and Texas saw a peak of 10,909 daily cases Thursday.
Southwest received $3.2 billion in federal funding to support payroll during the pandemic and was offered an additional $2.7 billion in a loan from the Treasury Department. It has until the end of September to decide whether to accept the funds, Bloomberg reported.
— Updated at 2:56 p.m.