Southwest Airlines warns staff of first layoffs in carrier's history

The coronavirus pandemic may force Southwest Airlines to do something it has never done before: furlough staff involuntarily.

After granting staff a six-month reprieve in July, the Dallas-based carrier sent notices of possible furloughs to 42 material specialists in its technical operations team on Friday. It was the first time Southwest has sent such notices in its nearly 50-year history.

The notices were sent after what the airline said were failed cost-savings talks with the International Brotherhood of Teamsters union.

Want more airline-specific news? Sign up for TPG's free new biweekly Aviation newsletter!

"This is not the result we hoped to achieve," Russell McCrady, vice president of labor relations at Southwest, said in a statement. "We are not closing the door to further discussions... we hope to continue seeing progress that will protect our employees."

Discussions with the Teamsters, and other unions, began in October after Southwest CEO Gary Kelly called for shared sacrifice among employees to get through the crisis.

If the furloughs occur, Southwest will join a long list of U.S. airlines forced to involuntarily reduce staff because of COVID. Alaska Airlines, American Airlines, Hawaiian Airlines, Spirit Airlines and United Airlines let go of well over 30,000 employees combined since Oct. 1. Employment protections under the federal coronavirus aid package, or CARES Act, expired the day before.

Related: Southwest Airlines seeks historic cuts from unions as it tries to avoid layoffs

Delta Air Lines may furlough up to 1,900 pilots if cockpit crewmembers do not approve a recently reached agreement-in-principal that would achieve needed cost savings for the airline.

Daily Newsletter

Reward your inbox with the TPG Daily newsletter

Join over 700,000 readers for breaking news, in-depth guides and exclusive deals from TPG’s experts

Email address

Sign up

By signing up, you will receive newsletters and promotional content and agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.

A six-month extension of the CARES Act payroll support program sought by the industry could see airlines recall staff and stop any additional furloughs. However, the fate of any further relief for U.S. carriers now appears to hinge on the outcome of the election.

As far as furloughs go, 42 staff members is small for an airline the size of Southwest. The carrier had 57,931 active full-time employees at the end of September, about 4% fewer than a year earlier.

Related: More than 30,000 furloughs begin as 'terrible Thursday' arrives for airlines

More than 4,200 Southwest staff took voluntary departure packages over the summer. Coupled with an extended leave program designed to avoid furloughs, the airline was able to reduce staffing by roughly a quarter.

With the warnings sent to staff, it does not appear the voluntary packages were enough. Southwest continues to hemorrhage money -- it expects to lose about $11 million a day in the fourth quarter — and executives have said that both additional cost cuts and more revenue is needed to breakeven.

"The worst may be behind us," Kelly said about the crisis in October. "And yes, we have a long way to go."

Related: Meet Southwest Airlines' nine hubs