Southwest Airlines Co. (LUV) is asking employees to "sacrifice more" as the pandemic continues to devastate the travel industry, saying it will ask union representatives for concessions because of the "inaction" of the federal government. In a video message to employees Monday, Chief Executive Gary C. Kelly said the goal is to avoid furloughs and layoffs through the next year, but furloughs would be the company's "last resort" if it fails to "reach agreement on reasonable concessions," and quickly, with unions. Cost-cutting related to salaries and benefits would be reversed or halted if the federal government extends its bailout, he said. Southwest is "playing offense" and seeking to add cities to its schedule and gain customers, Kelly said. Government support "just didn't last long enough," he said. "The pandemic has devastated travel and tourism ... Costs and spending have been cut dramatically, but not nearly enough to offset a 70% revenue loss," he said. "Absent substantial improvements in our business, our quarterly losses could be in the billions until vaccines are available, distributed, and effectively kill the pandemic-and at best that is looking like late next year." Shares of Southwest were flat in the extended session Monday after ending the regular trading day down 0.7%.
-Claudia Assis; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
October 05, 2020 17:22 ET (21:22 GMT)
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