Southwest's Threat of Historic Furloughs Already Deepening Divide With Unions

Southwest Airlines has famously not laid off or involuntarily furloughed a single worker in its almost 50 years of operation. That may change. The carrier told more than 6,800 employees that furloughs could begin in March if industry conditions don't change or Congress doesn't provide more aid.

Furloughs are a "last resort," CEO Gary Kelly said at the Skift Aviation Forum last month. Then, the carrier had issued federally mandated WARN Act notices to a few hundred employees as union talks broke down. Now, the furloughs have been extended to all unionized workgroups, except for two: Dispatchers and meteorologists.

The issue is the company is seeking a 10 percent reduction in compensation from all its unionized workgroups to match the 10 percent pay cut non-unionized employees are taking starting January 1. The cost-cutting is necessary to offset what it estimates to be $1 billion in overstaffing next year. The carrier had been in talks with all its workgroups for concessions, but the unions had not been receptive.

The workers affected are as follows: 2,551 ramp and cargo agents; 1,176 customer service agents; 370 customer support employees; 1,500 flight attendants; 1,221 pilots; six flight instructors; and four flight simulator technicians. "Our absolute goal is to preserve every job at Southwest Airlines; however, due to a lack of meaningful progress in negotiations, we had to proceed with issuing notifications to additional employees who are valued members of the Southwest family," said Russell McCrady, vice president of labor relations. The company is urging unions to return to the negotiating table to reach a deal, he added.

So far, the unions have balked. "This is a sad day for Southwest Airlines," said Lyn Montgomery, head of the flight attendants union, in a video message to members.

Jon Weaks, head of the pilots union, made it even more personal by drawing an unfavorable comparison between Kelly and legendary Southwest founder Herb Kelleher, who died in 2019. In a video message to members, Weaks said Kelly had put a "dollar value" on Southwest's culture. The company is negotiating in bad faith and is not offering more voluntary separation options because doing so could preclude furloughs, he added.

Congress is considering extending the Payroll Support Program for airlines through March, but a bipartisan proposal for more fiscal aid remains stalled on Capitol Hill. Weaks noted federal aid could prevent furloughs, and vaccines could result in a quick airline industry recovery.

Labor relations at Southwest have been fraught for years. In 2016, the pilots union released what it called a "vote of no confidence" in Kelly, urging him to step aside. In the last couple of years, Southwest has reached deals with mechanics and flight attendants only after protracted, contentious negotiations.

This marks a change from earlier in Southwest's history, when the carrier was known for relatively smooth labor relations. Kelleher said "culture is everything" in running a successful business. But over the years, unions have publicly said the company is drifting from his vision, becoming more like the company's competitors. "We are here, fighting for the culture of Southwest Airlines," Montgomery said. "Today is a day we will never forget in our Southwest Airlines careers."