In an effort to reduce staffing by about 30 percent, Southwest Airlines will offer a buyout package to its pilots. The company said this will help prevent layoffs or extended furloughs.
Airline industry analysts predict that it may take years to recover to pre-COVID-19 passenger levels, which means that most airlines are overstaffed for the near-term.
Southwest was one of the airlines that received CARES Act funding, but that support ends in September. By accepting CARES funds, airlines were prohibited from terminating employees. Southwest says its offer of early retirement or extended time-off opportunities for employees is “the most generous buyout package in our history.”
Employees choosing early retirement will retain their company-funded health insurance—those under age 55 will retain their coverage for a year, while those who are older will get coverage for five years or until they reach age 65, whichever comes first. In terms of compensation, Southwest will pay pilots roughly two-thirds of their pay (the equivalent of 67 TFP, or Travel for Pay, which is linked to flight hours per month) for five years or until they reach 65. Pilots who choose extended time off, which will be available for up to five years, will earn more than half their regular income (55 TFP per month), and retain both their health care and travel privileges aboard the airline.
Southwest leaders told employees, “Heading into the fall, we have planned to reduce our capacity by about 30 percent. While overstaffing isn’t tied 100 percent to capacity levels, it would be fair to assume that we are overstaffed in many areas at a similar percentage.”
Original Story: https://doav.virginia.gov