Southwest Airlines is preparing to furlough nearly 7,000 workers for the first time in its history
- Southwest Airlines just sent 6,828 workers WARN notices after it couldn't come to an agreement with employees to take a pay cut to avoid furloughs.
- Ramp workers and flight attendants are among the most impacted workgroup with over 4,000 WARN notices issued between them.
- Workgroups that accept Southwest's proposed temporary pay cuts will be exempt from any furlough.
Nearly 7,000 Southwest Airlines employees are facing furlough in the new year after negotiations to temporarily implement pay cuts broke down.
The Dallas-based airline confirmed to Business Insider that it issued 6,828 Worker Adjustment and Retraining Notifications, also known as WARN notices, to affected employees on Thursday. Workgroups included pilots, flight attendants, customer service workers, ramp agents, maintenance workers, technicians, and instructors.
Ramp workers including baggage handlers, tug operators, and aircraft marshallers are the most impacted workgroup with a total of 2,551 notices issued. That's followed by flight attendants with 1,500 notices, pilots with 1,221, and customer service workers in ground operations with 1,176.
Southwest maintains that it can avoid the furloughs if employees agree to a temporary pay cut for 2021, a similar first for the airline in its 50-year history. The Dallas Morning News reports that the airline is asking for 10% pay cuts to prevent the furloughs.
"Southwest Airlines has been in discussions since early October with union representatives from all of our contract groups to negotiate temporary cost reductions to help offset the billion dollars of overstaffing costs projected for next year," the airline said in a statement.
Although the WARN notices were issued, that doesn't necessarily mean a furlough is impending as Southwest could be using the threat of furlough to bring the workgroups back to the negotiating table.
"The workgroups that approve these temporary reductions for next year will receive protection from furloughs for all of 2021," the statement read.
This isn't the first time Southwest threatened furlough during the pandemic as the Dallas Business Journal also reported that mechanics and material specialists had received the required notices in November, as well. Those workers may be furloughed as early as January.
Furloughs wouldn't be the only first for the company during the pandemic as the airline has been constantly adjusting its business model to keep up with the new realities of travel. Southwest was among the first airlines to limit capacity on its aircraft in the spring; though, it eventually abandoned that practice after losing $20 million in potential revenue over the summer and reported a $1.2 billion loss for the third quarter.
Countless routes have also been added to its leisure-focused route network with the airline entering markets that it has famously avoided. Flights began to Miami International Airport in November and Southwest will serve Chicago's O'Hare International and Houston's George Bush Intercontinental in 2021.
Southwest has traditionally served the small alternative airports in major cities but now apparently wants to be where the people are. Larger airports are typically more expensive to utilize but the hope is that Southwest can further attract leisure customers with its already cheap fares and flights to popular sun destinations.
The airline is also reportedly looking to acquire additional Boeing 737 Max 8 aircraft from Boeing following the model's ungrounding by the Federal Aviation Administration in November. The two companies are reportedly in talks for up to 30 "white-tails," or aircraft that were built but lost their customer.
An early adopter of the 737 Max, Southwest was forced to ground its fleet in March 2019 at its expense alongside American Airlines and United Airlines in the US. But with the 20-month grounding now over, airlines are looking to bring on more of the type to take advantage of its cost-saving economics.
Workers in Southwest's dispatch and meteorology departments accepted the reductions in pay and were granted immunity from furlough, Southwest also confirmed. But the clock has now started for the rest of the affected workgroups and the first furlough could come on March 15.