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Southwest Airlines: Passenger numbers must triple to avoid layoffs

AMERICA's Southwest Airlines says passenger numbers need to triple by the end of the year to avoid layoffs, reports London's Air Cargo News

19 July 2020 - 19:00

AMERICA's Southwest Airlines says passenger numbers need to triple by the end of the year to avoid layoffs, reports London's Air Cargo News.

If the layoffs happen, it will be the airline's first-ever involuntary job layoffs. However, the future isn??t looking bright as rising Covid-19 cases across the country are restricting travel.



Southwest employees have until Wednesday to voluntarily leave or take extended time off to help cut labour costs. The company is overstaffed, said CEO Gary Kelly.



Although demand has increased since March, passenger numbers remain down 73 per cent from a year ago. Thousands of people could be laid off in October after restrictions tied to federal financial aid expire.



'The recent rise in Covid cases and increases in regional restrictions on businesses and states requiring quarantine aren??t positive developments for our business,' said Mr Kelly.



'We're very concerned about the impact on already weak travel demand.'



United Airlines said last week 45 per cent of its workforce risks losing their job after September. The airline claims to have 20,000 excess employees.



'Dallas-based Southwest will award as many voluntary separation and time-off requests as it can before moving to possible pay and benefit cuts for remaining employees,' Mr Kelly said.



'Although furloughs and layoffs remain our very last resort, we can??t rule them out as a possibility in this really bad environment,' Mr Kelly said. 'We need a significant recovery by the end of this year, and that??s roughly triple the number of passengers from where we are today.'



Southwest has reached an agreement with the US Treasury on a possible loan of about US$2.7 billion. The airline, which has until September 30 to make a decision, has already secured $3.2 billion in federal funding to help payroll costs.


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