The Chief Executive Officer of Dallas-based Southwest Airlines says the company definitely needs more financial help from Congress to avoid following in the footsteps of other airlines that have laid off or furloughed thousands of employees. The entire airline industry has seen a drop in demand of about 70 percent because of the COVID-19 pandemic.
Southwest CEO Gary Kelly is urging Congress to renew the Payroll Support Program that expired on September 30th. That program was part of the CARES Act which was approved by Congress in the spring. Fort Worth-based American Airlines, United Airlines and several other carriers all announced furloughs on October 1st.
"We are not there yet, and in the mean time...we await some action from Washington," Kelly said in a video message to employees that was posted on-line. "We're still losing staggering sums of money, and that is projected to continue for a long time - at least until a majority of the population receives a vaccine and we see travel demand recover."
Congress has been debating a renewal of the Payroll Support Program along with a larger COVID-19 relief package. "If the PSP extension fails, we'll be forced to find a way to further reduce our spending," Kelly said, "to reduce our salaries, wages and benefits specifically - by seeking concessions...or as a last resort...layoffs and furloughs."
Southwest has not turned to layoffs of furloughs as a cost-cutting measure during the pandemic, but has gotten some employees to retire or take voluntary leave. The airline has also altered its schedule. Those steps, Kelly warned, may not be enough to avoid furloughs going forward. "As the pandemic and its effects on our industry continue, we need an economic relief package that includes a clean extension of the PSP," he said, "and that would buy us six critical months to see our way through to the other side of this pandemic."
