Futures

Large Portion of Southwest Airlines Employees Voluntarily Exiting Company

As the airline industry continues to take hits this year, it was announced today that over 4,000 employees with Southwest Airlines (LUV) would be taking a voluntary leave of absence. Over 12,000 additional employees will also be taking extended emergency time off related to company staff reduction.

Earlier last week, Southwest warned that reducing its employees would be inevitable unless sales picked up. In a message to company employees, Southwest CEO Gary Kelly made clear that they would seek to perform layoffs and furloughs only as a last resort. However, in the same message, Kelly also pointed out that in order to stave-off losses and avoid employee reductions, Southwest would need to “roughly triple the number of passengers from where we are today.”

Southwest will be releasing its Q2 earnings report later this week. Financial experts expect that the airline will be following suit with others in the industry by reporting losses. Delta Airlines (DAL) reported over $5 billion in losses last week. Later this week, United Airlines (UAL) and American Airlines (AAL) will be releasing Q2 financial reports, which are also expected to reflect substantial declines in sales. It’s indicated by experts that airline industries could be looking at an overall sales amount of only $1.3 billion for the entire second quarter.

With the coronavirus continuing to rage in the U.S., sales continue to look bleak for the airline industry as a whole. Currently, over 3.83 million U.S. citizens have been confirmed infected with the deadly virus, with 143,000 people dead.

As they’ve been since March when shutdowns began, investors are expected to watch airline sales closely.


Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Trader Buzz). I have no business relationship with any company whose stock is mentioned in this article.

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