Southwest Airlines will not have to follow through with the
layoffs it warned of earlier this month thanks to the recently passed Covid-19
economic relief package, Southwest chairman and CEO Gary Kelly said.
As the package, which President Donald Trump signed over the
weekend, extends the Payroll Support Program through March 2021, Southwest does
not "anticipate the need to conduct any furloughs or pay cuts next
year," Kelly said in a memo to employees. Earlier this month, Southwest had
sent out a federally required warning to more than 6,800
employees—including flight attendants, pilots, customer service agents and
ground crew—after reaching a stalemate in negotiations with their unions.
Southwest had been asking for temporary pay cuts, but the package prevents the
need for those.
"As I’ve been saying for months, this was always our
preferred plan, and it means we can stop the movement toward furloughs and pay
cuts that we previously announced," Kelly said in the memo. "For
that, I am most grateful."
The layoffs would have been the first in the carrier's
history.
Both American Airlines and United Airlines last week began
the process of bringing back the 32,000 workers who were furloughed over the
fall, according to a report by CNBC. Bringing the employees back is a
requirement for payroll support aid. Delta Air Lines had
avoided furloughs in the fall via voluntary departure and early retirement
packages as well as employees agreeing to voluntary leaves of absence.
In a memo last week, however, United CEO Scott Kirby and
president Brett Hart said they would be unlikely to be able to keep all
recalled employees beyond the end of the payroll support extension.
"United has been realistic about our outlook throughout
the crisis, and we've tried to give you an honest assessment every step of the
way," Kirby and Hart said in the memo. "The truth is, we just don't
see anything in the data that shows a huge difference in bookings over the next
few months. That is why we expect the recall will be temporary."