A bird flies by in the foreground as a Southwest Airlines jet lands at McCarran International Airport in Las Vegas, Nevada on May 25, 2020.
Ethan Miller | Getty Images
The Dallas-based airline announced late Monday that it was calling on unions, which represent around 80% of its workers, to accept wage cuts to avoid involuntary vacation days until the end of 2021. Southwest will cut union workers’ wages by 10%.
“It’s a common sacrifice, and I think this type of company is good for the job,” Southwest CEO Gary Kelly told CNBC.Squawk box“on Tuesday. Kelly said he’ll be waiving his base salary until the end of next year.
Airlines are trying to curb money consumption as the demand for air travel remains at around a third of last year’s level as the pandemic discourages many potential customers from flying. In September, the Transportation Security Administration examined an average of 716,000 people per day at US airports, compared with 2.2 million per day the previous year.
The U.S. airlines agreed not to cut any jobs until October 1, under $ 25 billion in federal aid. Southwest has pledged not to lay off or cut workers’ wages until the end of this year, in part thanks to thousands of employees accepted the buyouts or volunteered to take a break.
Faced with a slow recovery, Southwest, its rivals and unions in the US are calling on Congress and the Trump administration to approve additional $ 25 billion in state aid to support payroll, which is generally the largest cost represents the air carrier.
The proposal was supported by both parties, but Congress and the White House have been bogged down for weeks over a new national coronavirus stimulus package that could include airline support. An attempt by the company to submit a separate invoice for more flight aid failed on Friday.
“Obviously, any sane person realizes that this is a major crisis not just for the airlines but also for the country,” Kelly told CNBC.
Kelly told employees late Monday that he would like to reach cost-saving agreements with the unions by January 1. If offers fail to be reached, vacation is a “last resort”.
If Congress passes additional support for airline payrolls, wage cuts in the Southwest would be reversed, Kelly said.
Offers may not be easy. The union representing Southwest’s flight attendants rejected the proposal to cut wages.
“TWU Local 556, the Southwest Airlines flight attendants union, has made it clear to the company in previous discussions that our members are not interested in making concessions on a contract that has taken decades to maintain,” said Lyn Montgomery, president of the Labor union. in a statement.
The union called on the public to support additional help from the federal airline.