Southwest Airlines told another 402 mechanics and other employees that they could be furloughed in January as the carrier tries to negotiate cost cuts with union groups.
Dallas-based Southwest, which is facing "multi-billion dollar losses" next year due to the COVID-19 pandemic and has never furloughed a worker in its 50-year history, is pushing for 10% wage cuts from every union employee after already cutting pay for non-union workers and management for 2021.
The workers issued furlough warnings represented by the Aircraft Mechanics Fraternal Association and include mechanics, appearance technicians and facilities maintenance technicians. The furloughs are scheduled for Jan. 25 if Southwest can't get a deal or Congress doesn't pass payroll stimulus for airlines.
Southwest also issued another 1,502 warnings to other AMFA members working at Southwest that could be furloughed due to seniority.
Southwest already issued warnings to 42 materials specialists on Nov. 6 for employees that help maintain stock for aircraft maintenance.
"We have been engaged with our unions since early October seeking pathways to help us reduce our costs, and it is unfortunate that we had to move forward with this outcome, as the affected Employees are valued members of the Southwest Family," Southwest Vice President of Labor Relations Russell McCrady said in a statement. "We are not closing the door to further discussions, but we need agreements to be reached to help us save these Employees' jobs and address the extremely challenging economic conditions we face."
The WARN Notices, required by federal and state law to give workers notice ahead of large layoffs, don't mean layoffs are imminent but lay the groundwork in the event that an employer does need to cut workers.
Because the workers have union contracts, they are protected from permanent layoffs through recall rights.
Competing carrier American Airlines, based in Fort Worth, has already furloughed or laid off 19,000 union and non-union workers as its faces similar struggles with a lack of air travel demand during the COVID-19 pandemic.
Southwest lost $1.2 billion in the second quarter and is still burning through about $11 million of cash a day. CEO Gary Kelly said last month that the company is about 20% overstaffed and will need to cut salaries and other costs if they hope to stop losing money.
But negotiations have been tense so far with unions. Pilots and flight attendants have pushed Southwest to come up with other options than cutting salaries. Lyn Montgomery, President of TWU Local 556 representing flight attendants, said that cutting salaries won't fix Southwest's problems with too many employees and not enough customers.
"Gary (Kelly) acknowledges that this is a demand problem," Southwest Pilots Association President Jon Weaks said in an interview last week. "This is where the company is going to have to do a lot of soul searching."
Kelly says the cost cuts are the only way to avoid massive deficits the company is facing next year as the airline industry struggles to climb out of the hole carved by the COVID-19 pandemic.
Some unions have criticized Southwest for having $13.4 billion in cash and short-term liquidity that they say could be used to pay workers. But Kelly and other Southwest leaders say they need that money to fund operations. Most of that money comes from loans and aircraft leases the company has pursued since the beginning of the pandemic.
