A Southwest Airlines Boeing 737-700 (LN2318) on final approach after a pre-delivery test flight at dusk.
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Southwest Airlines The pilots union is pushing for a company proposal to cut wages by 10% to avoid vacation until the end of next year. This is the latest fold in the airline’s efforts to cut costs on the pandemic.
Southwest tries Keep his record CEO Gary Kelly warned earlier this month that he would seek concessions from the unions, which make up the bulk of his workforce.
“Our goal is to protect every pilot job so we are ready to take advantage of sales opportunities when customer demand returns,” Southwest said in a statement. “Until then, we also need to start restoring our balance sheet by more closely balancing our loss of revenue with lower costs.”
All US airlines are grappling with a drop in revenue, driven by the sharp drop in demand for travel due to the virus. For the first 10 days of the month, the Transportation Security Administration examined an average of 804,302 people per day, a decrease of nearly 66% from the previous year.
On Friday, Southwest proposed cutting the wage rate by 10% for its roughly 9,000 pilots. The union, the Southwest Airlines Pilots Association, questioned the blanket reduction and force majeure provisions, which it feared the airline could rely on vacationers anyway.
“This addition would not protect us from vacation or ensure that our hourly rates go down after an agreement expires,” the union said in a memo to members.
The union pointed out other options, such as voluntary time off with reduced wages and early retirement packages.
“We have an income and short-term cash problem that cannot be fixed by concessions alone,” the union said in a memo on Friday. Its president Jon Weaks told CNBC that the company’s proposal was “dead on arrival” but the union was open to further discussions on cost-cutting measures.
The dispute comes as a competitor American Airlines and United Airlines More than 30,000 job cuts began earlier this month after billions in federal aid ran out. Southwest has no plans to take workers off this year, but said earlier this month it would seek concessions from unions for a job retention commitment through 2021.
United Airlines The pilots agreed to cut the minimum hours to avoid having nearly 3,000 vacation days planned this year.