Southwest Airlines plans to furlough 556 Denver airport workers
Southwest Airlines, the second-largest carrier operating at Denver International Airport, informed the state Thursday that it would furlough 556 of its Colorado employees unless it can reach agreements with four of its unions on cost-cutting measures or obtain more federal assistance from Congress.
“The involuntary furlough will take place next year unless we reach cost-saving agreements,” Julie Weber, chief people officer at the Dallas-based carriers said in a letter sent to the Colorado Department of Labor and Employment under the Worker Adjustment and Retraining Notification Act.
The Denver cuts are part of a larger national reduction of 6,800 workers that Southwest announced Thursday. Since taking to the air in 1971, the carrier has never laid off or furloughed workers.
Southwest participated in the Payroll Support Program, which provided $32 billion to the aviation industry under the CARES Act. When that funding expired at the end of September, the company turned to a voluntary separation program, an extended emergency time off program, and pay cuts for managers and non-union employees.
About 25% of workers took the voluntary separations, Weber said.
The company also entered into cost-cutting negotiations with the Southwest Airlines Pilots Association, the Transport Workers Union of America representing its flight attendants, the International Association of Machinists and Aerospace Workers, presenting its customer service agents, and the Transport Workers Union of America, representing its ramp, operations, provisioning and freight agents.
“After over two months of discussions, we have not made meaningful progress in cost-saving negotiations,” Weber said in her letter.
Jon Weaks, the head of the Southwest Airlines Pilots Association, said in a video sent out to pilots that the union had proposed several options for reaching the company’s cost-saving goals but that all of them had been rejected by labor negotiators.
“A furlough is not a foregone conclusion. We will continue to engage with the company,” he said. “Their entire process has been flawed.”
The 10% cut in pay the airline asked pilots to take would save about $220 million, but Weaks said they could be achieved in other ways and that the company was putting undue stress on its employees ahead of the holidays.
Unless there is a breakthrough in union negotiations or an agreement on additional stimulus, the company plans to furlough 54 customer service agents, 13 provisioning agents and 73 ramp agents in Denver on March 15, followed by furloughs for 327 flight attendants and 89 pilots starting April 1.
Southwest said in its letter that it had trimmed $8 billion in spending for its original budget and raised $18.9 billion from investors. But that still wasn’t enough to cover a 70% revenue loss it suffered in the third quarter.
With stimulus negotiations crawling along in Congress, and union negotiations stalled, the company said it had no option but to cut salaries, wages and benefits.
Before the pandemic, Southwest was looking to absorb 16 new gates on Concourse C and was building a $100 million maintenance facility. It counted nearly 4,200 employees in Denver in the summer of 2019 and by the following November received $12.9 million in state tax incentives linked to it adding another 1,013 jobs.
In late July, Frontier Airlines, the airport’s third-largest carrier, said it would sideline just shy of 400 workers. American Airlines announced plans to drop 109 of its Denver employees. In September United Airlines, the largest carrier in Denver, updated its layoff plans, saying it would furlough 913 workers in Denver, down from the 2,820 initially slated to stop working in a July notification.