Southwest rescinds furloughs and layoffs following federal PSP extension

Southwest Airlines

Last updated on January 14th, 2021 at 02:07 pm

Plans to furlough 45 Southwest Airlines employees at Milwaukee Mitchell International Airport have been rescinded after the federal government extended the length and increased funding for the Payroll Support Program.

The PSP, which is just $15 billion of the $900 billion stimulus bill that President Trump signed into law last month, was designed to reduce the number of layoffs in the airline industry amid the coronavirus pandemic.

Southwest attributed last year’s mass layoffs and furloughs across the country to the lack of a PSP extension – PSP will now run through March 31, 2021. The PSP previously provided $32 billion to fund airline industry payrolls for six months through Sept. 30, 2020.

The airline’s withdrawal of temporary involuntary employee furloughs and permanent layoffs impacts all Southwest employees, according to a WARN noticed filed with the state.

“Southwest Airlines is tremendously grateful for the recognition by federal leaders that the airlines are an indispensable part of the U.S. economy and that the PSP has been a successful program deserving of an extension,” the airline stated in the WARN notice.

Approximately 79,000 passengers flew with Southwest Airlines at Milwaukee Mitchell International Airport in November of 2020, compared to 225,550 passengers in November of 2019.

A total of 176,075 passengers flew in or out of Milwaukee Mitchell International in November of 2020, compared to about 526,420 passengers in November of 2019.

Like several airline industry companies, Southwest has been devastated by the economic impact of the COVID-19 pandemic, losing billions of dollars in revenue since March. To help offset that revenue loss, Southwest reduced its annual 2020 cash outlays and spending by approximately $8 billion compared with original plans.

Although the airline raised approximately $18.9 billion in cash since the beginning of 2020, Southwest reported a 70% loss in revenue in the third quarter of 2020.

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