Southwest Airlines told another 402 mechanics and other employees that they could be furloughed in January as the carrier tries to negotiate cost cuts with union groups, the carrier said Wednesday.
Dallas-based Southwest, which is facing "multibillion dollar losses" next year resulting from the coronavirus pandemic and has never furloughed a worker in its 50-year history, is pushing for 10% wage cuts from every union employee after already cutting pay for nonunion workers and management for 2021.
The workers issued furlough warnings represented by the Aircraft Mechanics Fraternal Association and include mechanics, appearance technicians and facilities maintenance technicians. The furloughs are scheduled for Jan. 25 if Southwest can't get a deal or Congress doesn't pass payroll stimulus for airlines.
Southwest also issued another 1,502 warnings to other mechanics union members working at Southwest that could be furloughed because of seniority.
Southwest already issued warnings to 42 materials specialists on Nov. 6 for employees who help maintain stock for aircraft maintenance.
"We have been engaged with our unions since early October seeking pathways to help us reduce our costs, and it is unfortunate that we had to move forward with this outcome, as the affected employees are valued members of the Southwest Family," Russell McCrady, vice president for labor relations at Southwest, said in a statement. "We are not closing the door to further discussions, but we need agreements to be reached to help us save these employees' jobs and address the extremely challenging economic conditions we face."
The warnings, required by federal and state law to give workers notice ahead of large layoffs, don't mean layoffs are imminent but lay the groundwork in the event that an employer does need to cut workers.
Competing carrier American Airlines, based in Fort Worth, has already furloughed or laid off 19,000 union and nonunion workers as its faces similar struggles with a lack of air travel demand during the covid-19 pandemic.
Southwest lost $1.2 billion in the second quarter and is still burning through about $11 million of cash a day. Chief Executive Officer Gary Kelly said last month that the company is about 20% overstaffed and will need to cut salaries and other costs if it hopes to stop losing money.