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Company News

UPDATE 1-Southwest flight attendants reject call for pay cuts, urge federal aid

(Adds details of dispute, political and industry background)

CHICAGO, Oct 6 (Reuters) - The union representing Southwest Airlines’ flight attendants on Tuesday rejected management’s call for negotiated pay cuts to avoid furloughs and renewed calls for more airline aid from Washington.

On Monday, Southwest Chief Executive Gary Kelly said he was asking unions to agree to pay cuts in order to prevent furloughs and layoffs through 2021 as the industry struggles to stem losses from the coronavirus pandemic.

U.S. airlines had pleaded for another $25 billion in federal payroll support before a ban on job and pay cuts under a first package expired on Sept. 30.

Lawmakers have so far failed to agree on a second COVID-19 stimulus plan and some airlines have started furloughing thousands of employees, a move Southwest has so far sought to avoid.

But TWU Local 556 President Lyn Montgomery said that before “cracking open the contracts that took us decades to obtain,” the union wants to ensure that no stone has been left unturned, noting that flight attendant concessions may not have a large material impact on Southwest’s daily cash burn.

About 32% of Southwest’s flight attendants have already agreed to voluntary departure or leave packages to help reduce the company’s payroll costs, she said.

U.S. airlines are burning through millions of dollars every day as demand hovers around 30% of 2019 levels and revenues remain sharply depressed.

The union representing Southwest’s pilots said on Tuesday it had tentatively agreed to meet and discuss cost savings if a second COVID-19 relief package does not pass in Washington.

Airline workers in general have been reluctant to accept pay cuts given wage losses in the aftermath of the Sept. 11 attacks and 2009 economic downturn. (Reporting by Tracy Rucinski in Chicago Editing by Chizu Nomiyama and Matthew Lewis)

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