Southwest Airlines warns workers of prospect of first involuntary layoffs in its 49-year history

Airline has asked employees to agree to pay cuts in bid to stem pandemic-induced losses

FILE PHOTO: Southwest Airlines planes are seen at LAX airport in Los Angeles, California, United States, October 22, 2015. REUTERS/Lucy Nicholson/File Photo

Southwest Airlines issued notices for what could be the first involuntary furloughs in its 49-year history, saying a union declined to discuss concessions aimed at cutting payroll costs.

Forty-two workers who manage parts inventory and are represented by the Teamsters union received federally-required notices that they could be laid off as of January 11, the Dallas-based airline said Friday. The full work group, which Southwest said voted not to engage in talks, includes 322 employees. The carrier remains in negotiations with other unions.

The action could foreshadow additional furloughs if Southwest doesn’t secure givebacks with groups such as pilots, mechanics and flight attendants. The airline has asked employees for a one-year, 10 per cent reduction in labour expenses after other cost cuts failed to stem millions of dollars in daily losses caused when the coronavirus pandemic eviscerated travel demand.

“We are not closing the door to further discussions,” said Russell McCrady, Southwest’s vice president of labour relations. “We hope to continue seeing progress that will protect our employees, while simultaneously responding to one of the greatest challenges ever faced by our airline.” Furloughed employees would be expected eventually to return to work.

While the workers, known as material specialists, declined to negotiate contract concessions, the union told Southwest it was willing to discuss other measures that would produce the cost savings, the Teamsters said in a letter to members. The employees “have already sacrificed much” through members who left the company voluntarily or took extended leave, the union said.

“The 42 jobs the company is threatening appears to be SWA using our small group to send a signal to other labour groups about the company’s potential intentions for furloughs,” said the letter from David Bourne, director of the Teamsters Airline Division. He reminded workers that such notices can be rescinded at any time for any reason, and that the union remains open to negotiations.

Southwest and its unions began talks in early October aimed at reaching agreements by the end of the month toward the airline’s goal of saving more than half a billion dollars. Concessions sought by the airline would protect workers from furlough through to 2021. The carrier reached deals with two small work groups and has extended talks with others for a short period.

An extension of federal payroll support for airlines would avoid Southwest’s need for concessions. Congress and the White House failed to agree before the election on a broad House of Representatives relief proposal that would include another $25 billion of payroll support beyond what carriers have already received.

US airlines have furloughed about 38,000 workers since October 1, including large swaths at American Airlines  and United Airlines. Those cuts followed the departure of 150,000 people through leave, buyouts or early retirements. About 17,000 employees have left Southwest temporarily or permanently through voluntary programmes.