Southwest to Avoid Layoffs Through 2021… if the Unions Agree
1 In a video message posted to southwest.com, Southwest Airlines CEO Gary Kelly said that the airline plans to avoid any furloughs or layoffs through the end of 2021, assuming that the unions will agree to cost saving measures. The airline has famously never been forced to furlough or lay off any employees in its history and plans to continue its streak for another year.
With a second PSP or CARES Act currently stalled in Congress, many Southwest executives, including Kelly, will be taking pay cuts to help the airline curtail spending. Kelly will take a salary of $0 through the end of 2021, while a 20% reduction in salary for the airline’s most senior execs will continue through 2021 as well. Further, payments to Southwest’s board of directors will be reduced 20%, though if those board members really believe in the culture, we’d suggest they should voluntarily further reduce or eliminate their payments.
One option being considered by Southwest is to reduce the number of pretzels in each bag by 33%, but that just didn’t pencil. Instead, it will reduce salaries of all junior leadership 10% effective January 1. The airline will also be entering negotiations with its unions to get concessions. Kelly set a deadline of January 1, 2021. If there is no deal by then, furloughs may still become reality.
The airline will continue to lobby Congress for a second PSP or other stimulus to help sustain itself through March and if one is passed, the salary reductions will be returned to their original levels. The pretzels, however, will still remain on the chopping block.
Hawaiian Slowly Ramps Up Mainland Flying As State Reopens
2 Hawaiian Airlines is slowly building its mainland network back up with the state of Hawai’i welcoming visitors back on October 15 without a mandatory quarantine… with a catch. Visitors will be required to present a negative COVID test upon arrival to avoid the quarantine.
Hawaiian resumed flying to Las Vegas earlier this week. Next up for the airline are Oakland, Phoenix, and San Jose – all three are expected to restart flights to Honolulu in early November. Los Angeles will also be reconnected with Kahului (Maui) next month. Instead of a traditional lei greeting, Hawaiian is instead going to offer a new tradition of greeting travelers with a demand to see their COVID status. It should help provide a warm, welcoming start to the vacation.
To assist customers with their COVID testing needs, Hawaiian has partnered with drive-thru testing centers near both Los Angeles and San Francisco’s airports, but the airline hopes to expand to most – if not all – of its West Coast gateways.
Air Asia Japan Says Sayonara
3 AirAsia Japan will cease operations after its parent company AirAsia Group opted to stop funding the airline on Monday. The closure of the airline was rumored as early as last week, but it held on for the weekend before having the plug pulled.
Prior to the closure, AirAsia Japan had a fleet of three Airbus A320ceos. The airline will look to liquidate the planes to help pay off creditors while operations wind down. This, you may (or very well may not) recall, is the second incarnation of AirAsia Japan. The first was a joint venture with ANA. ANA took control and rebranded it as Vanilla Air, later merging it with Peach.
AirAsia Japan is not the only member of the AirAsia family to face an uncertain future, as reports out of India say that AirAsia is halting its funding of AirAsia India and that the airline is currently for sale. A buyer has made an offer of $54 million from the airline, but negotiations and the future of the airline remain murky. Further, long-haul operator AirAsia X continues to lose massive amounts of money and will likely need an intervention.
One operator not impacted is the fictional AsiaAir of Taiwan, a country that always gets it airline names confused with those from elsewhere.
And We’re Back: Mango Resumes Flying
4 One week after being forced to cease operations, South Africa’s Mango Airlines is taking to the skies once again after reaching an agreement with SAA Technical, the subsidiary of South African Airways that performs maintenance for the airline and hadn’t been paid in months.
The details of the agreement between Mango and SAAT was not disclosed. Mango said it couldn’t comment on the confidential agreement, only sharing that the arrangement is acceptable for both sides. A source close to the negotiation would not confirm or deny that SAAT would agree to the airline’s insistence that payment be made in mangoes, but it is believed that whether fruit or money would be used was a sticking point in previous negotiations.
Mango operates a fleet 14 B737-800s that it relies on SAAT to maintain. The airline operates to eight destinations, seven in South Africa and Zanzibar Airport (ZNZ) in Tanzania. It would seem that paying the people responsible for keeping your planes airworthy would be a smart way to do business, and we assume the airline is going to do its best to adhere to that policy going forward.
Gatwick to Charge for Curbside Drop Offs
5 London/Gatwick airport, desperately searching for new revenue streams, is planning to monetize its curbside in 2021. The airport will levy a £5 charge for all cars who drive onto the airport property and drop a passenger off at the curb.
The best way to avoid the charge is to use another of London’s five airports enter the parking lot, as the airport still offers two free hours of parking in lieu of a cell phone lot, giving passengers and their ride an alternative.
The airline claims that the policy is designed to reduce its carbon footprint with airport drop-offs being the least sustainable type of journey to the airport, but this feels like a straight cash grab being disguised as an environmental benefit. For that reason, we expect Ryanair to gleefully add more flights as a show of approval.
By maintaining the two free hours in the garage car park, dropping someone off at the airport is simply less convenient, but is unlikely to reduce the number of journeys to and from the airport. Instead, the airport will suck revenue out of those who opt for the convenience of the curb.
Airline Potpourri
- Air Cairo is resuming once-weekly service from Hurghada (HRG) to Budapest for the first time since 2018.
- Emirates is now up to 31 destinations in Europe as it returns flying to Budapest, Bologna, Lyon, Dusseldorf, and Hamburg.
- Somon Air, which currently operates eight aircraft, is in discussions with Boeing to purchase the 737 MAX. Buy low, sell high, right?
- United will resume 4x-weekly service between San Francisco and Shanghai/Pudong on October 21.
- WestJet is now operating the B787 Dreamliner between Vancouver and Toronto/Pearson.
- WizzAir saw its September passenger numbers fall 59% from 2019.
David’s Moment of Levity
Everyone studies the historical figure Karl Marx in school, but so few remember his sister, Onya. She invented the starter pistol.