Gary Kelly, Southwest Airlines chairman and CEO, made his message to employees Monday night clear — employees need to consider pay cuts in the name of preventing furloughs and layoffs.
The Dallas-based carrier will cut non-contract employees' salaries 10 percent starting Jan. 1. Now, the company will turn to the unions which represent tens of thousands of employees for concessions. Approximately 83 percent of Southwest's roughly 60,000 employees are represented by unions, according to regulatory filings.
It's unknown how successful the company will be in extracting concessions from unions, as some organized labor leaders have already said they aren't interested in concessions.
Lyn Montgomery, president of TWU Local 556, the union which represents more than 17,000 Southwest flight attendants, said in a prepared statement Tuesday her union "made it clear to the company in previous conversations that our members are not interested in making concessions to a contract that took decades to obtain."
Contract negotiations between airlines and employee unions often take several years. Kelly said Monday the goal is to have a cost-savings plan in place by the end of the year — "we simply don’t have time for long, drawn-out, complex negotiations" — meaning the company and unions will have less than three months to reach an agreement on a plan.
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