Southwest CEO announces pay cuts to avoid layoffs by 2021
A Video Monday for employees, Southwest CEO Gary Kelly The airline announced it would make “more sacrifices” Wage cuts In an attempt to avoid Dismissals and furs By 2021 Corona virus Current impact of infection Travel Required.
Kelly noted that with the expiration of the Wage Support Scheme (BSP) of the Act, the Southwest “could not pursue the conditions necessary to maintain full pay and employment.”
Praising his staff, they called them “our heroes” saying “everyone has acted wonderfully”, but the 12-year-old CEO said, “Now is the time to do what needs to be done to save Southwest Airlines.”
Although Kelly said he was grateful for six months of previous wage support, he argued that it “did not go far or long,” when domestic air travel fell to “1970s levels” during epidemics, at least 70% a year ago.
“Cost and expense in the Southwest has been dramatically reduced, but not enough to cover the 70% revenue loss,” Kelly noted. “Salary, wages and benefits are our biggest expense, and we need to clear up huge sums of wages, salaries and benefits to match lower traffic levels.
He warned that by the time a vaccine was available and distributed, the plane’s quarterly losses could be in the billions, and that the virus, which did not exist until late next year, could be “effectively killed.”
“We hoped the federal government would move quickly again, but they didn’t, and it was disappointing,” Kelly added. “We strongly urge that we have the greatest support for the expansion of the Socialist Equality Party, so that we do not yet see legislative action against its hatred.”
With immediate effect, Kelly’s already reduced base salary will be zero, which will continue until the end of 2021. Meanwhile, Southwest has previously announced a reduction in board fees and the base pay of senior executives of the airline has already been reduced by 20%, which will remain the same by the end of next year.
In addition, the base salary of the remaining leadership groups will be reduced by 10% from January 1, 2021 to next year. These cuts will have an impact on efforts to prevent Southwest non-contract employees from being laid off by the end of next year.
While Kelly assured union workers that his goal was to avoid discouragement, he warned that the option would be used as a “last resort” if the Southwest and its unions “failed to reach an agreement on fair concessions.”
“We don’t have time for long, drawn-out negotiations and I advise our company’s working group to take a simpler approach,” Kelly said.
If the PSP is extended next March, pay cuts efforts will be halted or replaced.
Kelly stressed that the company is focused on driving traffic, winning old customers and gaining new customers, noting that the company “blames” itself by adding new cities to its schedule.
“If we’re excited, we have to cut deep to realize enough savings, and reducing our capacity works deeply against our goal of driving more traffic,” Kelly said. “We need cost savings and people. It’s that simple.”
The Southwest project is coming as its rivals have already begun labor layoffs.
|L.U.V.||Southwest Airlines Co.||38.49||-0.27||-0.70%|
|UAL||United Airlines HLDG||36.20||+0.19||+ 0.53%|
|AAL||American Airlines Group Inc.||13.12||+0.12||+ 0.92%|
Southwestern stock to one share at the close of trading on Monday. Closed at 38.49 and declined slightly during hourly trading.