In a memo to employees sent last weekend, Southwest Airlines CEO Gary Kelly warned that “the ship is taking on water.” As Southwest Airlines moves closer to furloughs for the first time in its history, Kelly is warning that pay cuts will be needed to avoid them. But flight attendants and other unions don’t appear ready to make concessions.
Southwest Airlines CEO Warns Of Furloughs, But Unions Shrug
Southwest Airlines lost $1.6BN in 2020 Q3 and hopes of a Christmas recovery have all but evaporated. Now CEO Kelly has presented an ultimatum to employees: take a 10% pay cut or face furloughs for the first time in company history.
Yet unions don’t seem all that concerned. WARN notices (notices of potential layoffs mandated by federal law) will be coming, but Transport Workers Union Local 556, the union representing Southwest flight attendants, seemed dismissive of the potential notices:
“Your negotiating team believes that the company will continue through the process of issuing notices of potential furloughs as required by the WARN Act, even if those notices are not followed by furloughs.”
Thus far, the union has refused to consider pay cuts.
The Aircraft Mechanics Fraternal Association also dismissed potential pay cuts, calling Southwest’s promise of no layoffs duplicitous when it couched its promise the caveat of “barring unforeseen or uncontrollable circumstances.”
The Southwest Airlines Pilots Association also condemned the caveat, noting:
“That language is wholly unnecessary as [Southwest] pilots will work collaboratively on solutions that are favorable to both parties, just as we have always done at Southwest Airlines, should ‘unforeseen or uncontrollable circumstances’ arise.”
Gary Leff reasons that unions may be burned for calling Southwest’s bluff.
That may be, but I think there is something else going on: senior Southwest flight attendants would rather see junior members cut than face pay cuts for themselves.
While in Chicago last week, I had an extended conversation with one such flight attendant. She was non-revving on United Airlines (for the first time) and was not used to O’Hare Airport or United’s procedures (Southwest has a hub in Chicago Midway, but will start O’Hare service in 2021). I was sitting in the gate area (maybe she stole my pizza?) and she hit me up with some questions about boarding.
We began talking and she made perfectly and unequivocally clear:
“I am not giving up anything. We will not take a pay cut at all. Let the juniors be furloughed. Whenever you give something up, you never get it back.”
Take that for what it is worth…the opinion of one flight attendant. But based upon the way United Airlines’ more senior members approached furloughs, this position hardly seems surprising.
Perhaps the flight attendant union is not concerned about WARN notices because its senior members have made clear they will accept no pay cuts. Thus, this becomes less an issue of calling out Southwest’s bluff and more an issue of airline unions being airline unions by protecting their senior members at the expense of their junior members.
image: Southwest Airlines