CEO says Southwest needs union pay cuts to avoid furloughs

Southwest Airlines says its workers must take pay cuts or face furloughs next year

DALLAS — Southwest Airlines will cut pay for nonunion workers in January and says union workers must also accept less pay or face furloughs next year as the pandemic continues to hammer the airline business.

“We would have to wipe out a large swath of salaries, wages and benefits to match the low traffic levels to have any hope of just breaking even,” Kelly said in a video to employees.

Kelly said he won’t get a base salary through 2021 and non-union employees will see a 10% pay cut Jan. 1 to avoid layoffs through 2021. Southwest will negotiate similar cuts from union workers, who represent about 85% of the workforce.

Pay for union pilots, flight attendants, mechanics and ground workers are governed by long-term contracts, but Kelly wants “reasonable concessions” by Jan. 1.

Southwest brags that it has never laid off employees in its roughly 50-year history. The Dallas-based carrier — along with Delta Air Lines — convinced thousands of workers to take early retirement or buyouts but avoided layoffs or furloughs. In contrast, American Airlines and United Airlines furloughed 32,000 workers between them last week.

All the carriers are lobbying Congress and the White House for another $25 billion in taxpayer money to pay workers for the next six months. That’s on top of up to $50 billion in cash and loans that Congress approved in March. Kelly said pay cuts would be rescinded if Congress approves more money.

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