Southwest Airlines plans to furlough 18 mechanics located at Milwaukee Mitchell International Airport, the airline announced in a WARN notice recently filed with the state.
Since March, Southwest operated without any employee pay cuts, layoffs or furloughs because of the federal government’s $32 billon Payroll Support Program, which was part of the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act.
However, the program, which provided economic relief for passenger air carriers, cargo air carriers and certain contractors providing services to air carriers, expired on Sept. 30 of 2020.
Like much of the air travel and tourism industry, Southwest has been devastated by the economic impact of the COVID-19 pandemic, losing billions of dollars in revenue since March. To help offset that revenue loss, Southwest reduced its annual 2020 cash outlays and spending by approximately $8 billion compared with original plans.
“Southwest has also raised cash of approximately $18.9 billion since the beginning of 2020, but we cannot disregard our almost 70% revenue loss in third quarter 2020,” the airline stated in the notice.
Southwest previously implemented a voluntary separation program and an extended emergency time off program, which helped further reduce staffing costs with approximately 25% of employees taking voluntary options.
However, with PSP’s expiration and no clarity that Congress will extend it in the future, Southwest needed to take further action to reduce costs associated with employee salaries, wages, and benefits, the company stated in the notice.
Last month, Southwest announced plans to reduce wages or engage in other cost-saving measures for all leadership and non-union employees. The airline expects these actions will permit Southwest to avoid layoffs for non-union employees through next year.
For Southwest Union employees, the company is currently working with unions to negotiate cost-saving agreements. In exchange for such agreements, Southwest has promised protections from furloughs for union employees through next year.
However, after nearly six weeks of discussions, the airline had not made “meaningful progress” in cost-saving negotiations with the Aircraft Mechanics Fraternal Association, which is the union representing negotiations with Southwest mechanics, facilities maintenance, technicians and aircraft appearance technicians.
As a result, the airline could begin furloughing Southwest mechanics at Milwaukee Mitchell starting Jan. 25, 2021. The airline expects the furlough to be temporary but is likely to last at least six months, according to the notice.
In September of 2019, approximately 219,571 passengers flew with Southwest from Milwaukee Mitchel. However, that number dropped to 71,000 in September of 2020, according to Milwaukee Mitchell International airport monthly data.
