Throughout its nearly 50-year history, Southwest Airlines has never had to furlough an employee. But COVID-19 represents a unique and burdensome challenge. While Southwest is not out of the woods yet, an outpouring of support from employees may again help Southwest to avoid forcing people out of a job.
More Than 25% Of Southwest Employees Are Ready To Support Company By Leaving
16,895 of about 60,800 employees at Southwest Airlines have agreed to leave the carrier, via retirement, a voluntary exit package, or extended unpaid time off.
Southwest CEO Gary Kelly called this a “bittersweet moment” but added, “I’m very pleased with the response.”
To be sure, it is not pure altruism at play. Early separation packages have clearly been attractive. In fact, Southwest described its buyouts as the “most generous buyout package in our history.” As The Dallas Morning News reported:
“Most Southwest employees with more than 10 years at the company would get a year’s pay and four years of flight privileges if they opt for early retirement. Pilots would get paid about two-thirds of their average salary for five years or until they hit 65, whichever comes first. Early retirees would also get a year of company-paid health insurance.”
That’s nothing to scoff at.
The Southwest Furlough Battle Is Not Won…
Last week, Kelly told employees:
“The recent rise in COVID cases and increasing regional restrictions on businesses and states requiring quarantine aren’t positive developments for our business. We need a significant recovery by the end of this year—and that’s roughly triple the number of passengers from where we are today.”
That was on July 13th. A week later, tendlines are looking worse, but more importantly demand is continuing to drop. While Southwest still plans for a full schedule by end of year (with a higher concentration on domestic routes), it is far too early to tell how the pandemic will develop. Southwest will announce quarterly earnings on Thursday, which should give us more insight into next steps.
CONCLUSION
While American and United have failed to gain traction in terms of convincing a sufficient number of employees to voluntarily depart, it seems that Southwest is at least on track toward doing so. That’s a testament to the Luv (Southwest’s stock ticker) employees have for the health of their company and the leadership that made such concessions possible.
Herb’s blood still runs through the veins of Southwest.
“Most Southwest employees with more than 10 years at the company would get a year’s pay and four years of flight privileges if they opt for early retirement.”
Just four years of flight privileges?
In 2006 I took early retirement after 10 years at Northwest Airlines. *Lifetime* flight privileges were part of the package, for me and my husband. Those flight benefits have continued with Delta, and include the ability to sit up front when there is space.
I’d say you got the better end of the deal, Kenneth! I wish both of you many decades more of travel.
Give them the same package AA management got to leave and you wouldn’t see nearly the luv … SWA got 1 years salary … AA got 3 months (there were 3 options with various levels of other incentives but all had 3 months salary). You can luv your company but it always comes down to the dollars.
Most early retirement packages are intended to tide the participant over until they reach retirement age. At that point, the standard retirement benefits kick in, including flight privileges.
If you meet the company age requirement for retiree, then lifetime benefits are guaranteed. The 4 years are for the ones that have not met the airline retiree age. I’m
What do you expect them to get….. lifetime free travel just for having worked for Southwest ? Early retirement would be for those that are not of retirement age or not even close to retirement age but have put in a minimum of ten years. Frankly, Southwest with it’s ever-Disney mentality is being too generous.
If you meet the company age requirement for retiree, then lifetime benefits are guaranteed. The 4 years are for the ones that have not met the airline retiree age.
Didn’t Delta get 17,000 employees to take early retirement? I would not call that failing. United and AA on the other hand…
But AA just put out a new package, so we shall see who takes it. It seems United is having a lot of difficulty with getting it’s workers to take it. So I’m guessing they are not happy overall with the deal offered.
Don’t do it. It’s a bail out. Stay with SW. Greatest airlines ever. Too many people give in.. long term benefit will be your best decision ..
I wouldn’t say that Delta has failed, considering they just said that they have had 17,000 people take their early retirement package. Also they have had 35,000 people take voluntary leaves, which is almost 40% of their workforce.