Southwest Airlines’ pilots union, Southwest Airlines Pilots Association (SWAPA), is not happy with the airline’s proposal for all pilots to take a 10% cut in pay. Earlier this month, Southwest Airlines CEO Gary Kelly said all employees would need to take a 10% pay cut to avoid layoffs as COVID-19 continues to hammer the airline industry.
Southwest Airlines is trying to preserve its status as never having to furlough a single worker in its 50-year history. To do so, it must cut wages. Like every airline, the Dallas-headquartered Southwest Airlines saw a massive decline in passenger numbers and thinks it can save jobs by cutting its employee salaries.
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Southwest needs to cut costs
Business news broadcaster CNBC received an emailed statement from the airline which read,
“Our goal is to protect every pilot job so we can be prepared to take advantage of revenue opportunities when customer demand returns. Until then, we must also begin to restore our balance sheet by more closely aligning our loss in revenue with lower costs.”
A steep decline in passenger numbers has many US carriers hoping that the federal government will help them keep people in a job until travel picks up. Looking at figures from the Transportation Security Administration (TSA), agents screened an average of 804,302 people a day for the first ten days in October. This figure is down almost 66% from the numbers recorded for the same ten days in 2019.
Dead on arrival
Last Friday, Southwest Airlines put its pay cut proposal to the union representing its roughly 9,000 pilots. SWAPA took issue with the request and its force majeure clauses that could lead to future layoffs.
“This addition would not protect us from furloughs or ensure us that our hourly trip rates would snap back after the term of any agreement,” the union said in a memo to its members.
SWAPA suggested other money-saving options to Southwest, such as voluntary time off at reduced pay and early retirement packages.
“We have a revenue and short-term cash problem that cannot be fixed by concessions alone,” the union said in a memo on Friday, seen by CNBC.
Union president Jon Weaks told CNBC that Southwest’s proposal was “dead on arrival” but that the union was open to other cost-saving measures.
American and United are shedding 30,000 jobs
The dispute between Southwest Airlines and its pilots’ union comes as United Airlines and American Airlines began to cut thousands of jobs once billions of dollars in federal aid stopped.
To avoid 3,000 pilot furloughs, United Airlines pilots agreed to reduce their working hours. Southwest, meanwhile, said it would not get rid of workers this year but needed concessions from unions not to have to start laying off employees in 2021.
As the world grapples with the coronavirus crisis, all sectors of the travel and leisure industry are facing unprecedented hardships. Compromises need to be made by all sides if businesses are to survive and recover once the medical emergency is over.
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