Airline industry not likely to recover for at least a year - Southwest CEO
INTERNATIONAL - The airline industry is not likely to recover to pre-coronavirus levels for at least the next six to 12 months, Southwest Airlines Chief Executive Officer Gary Kelly said on Thursday.
The Covid-19 pandemic has brought a virtual halt in air travel, leading to an unprecedented number of flight cancellations globally and forcing airlines to book hefty losses.
Southwest last month posted its first quarterly loss in nine years and warned that there was no major improvement in air travel in the second quarter.
As the industry grapples with the crisis, Kelly said in a video posted on the airline’s website that the company was offering employees more options to opt-in for leaves as well as voluntary separation packages.
About 21% of the company’s active workforce is volunteering to take some form of time off or partial pay program, Kelly added.
The airline is receiving about $3.3 billion in government payroll support and had said that it was considering tapping an additional $2.8 billion in secured government loans under the stimulus package known as the CARES Act, among other liquidity options.
It had $9.3 billion in cash and short-term investments as of April 24, with leverage of 47 percent.
Under the terms of government payroll support, airlines cannot lay off employees before Sept. 30. If demand remains weak, Southwest has said it may need to reduce its workforce after that date and re-think its fleet.
Separately, the Dallas-based company also said it would provide masks to passengers who are not wearing one. It had implemented a policy on Monday that required passengers to wear face masks or coverings.Reuters