CHICAGO/WASHINGTON (Reuters) – Southwest Airlines Chief Executive Gary Kelly told employees on Monday it needs a dramatic jump in passenger demand or it will be forced to take new steps to reduce staffing.
Employees face a Wednesday deadline whether to participate in a voluntary incentive program to leave the airline.
“Although furloughs and layoffs remain our very last resort, we can’t rule them out as a possibility obviously in this very bad environment,” Kelly said in a message to employees. “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.”
Kelly added that the “recent rise in COVID cases and increasing regional restrictions on businesses and states requiring quarantine aren’t positive developments for our business, and we are concerned about the impact on already weak travel demand.”
Airlines are grappling with overstaffing as they decide whether to further limit passengers on flights.
JetBlue Airways Corp said Monday it will extend blocking middle seats on larger airplanes and aisle seats on smaller aircraft for flights through Sept. 8 in response to COVID-19. Other airlines, like American Airlines are again booking flights to capacity.
Last week, United Airlines said it was preparing to send notices of potential furloughs to 36,000 U.S.-based frontline employees, or about 45% of staff, as travel demand hit by the coronavirus pandemic struggles to recover.
Not everyone who receives a notification will be furloughed, United said. Furloughs would begin Oct. 1, when a government-imposed ban on forced job cuts by airlines that accepted billions of dollars in federal assistance expires.
Delta Air Lines, which is blocking middle seats through at least Sept. 30, told employees Thursday it plans to get “smaller as we look ahead to the recovery, which is likely to be lengthy and slow.”
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