A Southwest Airlines plane departs Midway Airport on January 25, 2018 in Chicago, Illinois.
Scott Olson | fake pictures
More airline employees are signing up for purchases, licenses and early retirements as the threat of permits looms this summer.
About 17,000 employees or about 28% of Southwest Airlines’ workforce have signed up for partially paid extended absences or direct purchases, company CEO Gary Kelly said Monday. About 4,400 went to work to buy, while nearly 12,500 expressed interest in extended leisure time, Kelly said in a staff note seen by CNBC.
Airline executives have urged employees to take unpaid or partially paid time off. Companies are offering a host of early retirement and purchase programs, as well as unpaid or partially paid temporary time off that provides health care benefits but reduces the labor expense of carriers. The results of the programs are produced when the demand for air travel decreases during the important summer travel season.
“Overall, I am very pleased with the response to these programs,” Kelly said in the memo, which the Dallas Morning News previously reported. “I am incredibly grateful to those of you who answered the call. I know there are stories behind each of those 16,895 decisions, from their incredible story on Southwest Airlines to stories of what is to come in their next phase.”
Southwest, which reports quarterly results before the market opens Thursday, had no immediate comment.
At Delta Air Lines, the deadlines for pilots to apply for early retirement packages closed Sunday and 2,235 of them signed up, according to their union.
“Voluntary participation in the early release program exceeded our expectations, which is positive,” said Association of Airline Pilots spokesman and Delta pilot Christopher Riggins.
Last month, Delta said about 2,600 pilots would be warned of possible licenses when federal aid terms expire this fall, adding that more than half of the airline’s more than 14,000 would be eligible. When deciding on the number of jobs at risk, Delta had already considered routine retirements as pilots approached the federally mandated retirement age of 65.
“This is significant progress as we seek to mitigate permits and our teams are working hard to determine next steps and assess how early pilot retirement can affect the overall outlook of Delta’s pilot personnel,” Delta said in a statement.
Delta’s early retirement program offers pilots a partial payment of up to three years and extended health insurance coverage.
Last week, Delta asked pilots to reduce their minimum hours by 15%, a plan the airline said would avoid involuntary permits for a year, CNBC reported for the first time.
Southwest shares fell more than 2.4% in afternoon trading, while Delta lost 2.3%. United and American fell more than 3%.
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