Southwest Airlines will provide details of a buyout package to employees on May 4, with a decision deadline of June 19 for employees.
The low-cost airline, which is the No. 3 carrier at Denver International Airport, doesn’t have a target for how many of its 35,500 employees it wants to take the voluntary systemwide “early out.”
“We certainly will be planning to manage with fewer employees as time goes by,” chief executive Gary Kelly said Monday.
More job cuts could come, as Kelly noted, “We’ll continue to do the best we can to match our head count with our flight activity.”
On April 16, Southwest posted a net loss of $91 million for the first quarter, the third straight quarterly loss after years of profit. Kelly called the loss “disappointing,” though not unexpected with weak travel demand and a recession.
Freezes have been placed on hiring and senior-management pay. Kelly has taken a 10 percent pay cut.
The Southwest workforce grew 2 percent from the first quarter of 2008 to the first quarter of 2009, but flight activity was down 4.1 percent in the same period.
While there are signs of life in the economy, Kelly said, “All we can do is be prepared for the recession to continue.”
Southwest plans to cut capacity — the number of seats — by up to 5 percent this year.
Capital spending will be cut by about $1.4 billion this year and in 2010 with deferred aircraft deliveries, suspension of plans to expand capacity and speeding up the retirement of older aircraft.
Southwest will still receive 13 new Boeing 737-700s this year but will retire 15 planes by the end of the year.
An arrangement with Volaris, a Mexico-based airline, should bring in revenue. Monday, Southwest announced customers can book flights to Mexico through Volaris on .
Southwest does not offer service to Mexico. The two airlines will announce code-share flight schedules by early 2010.
Kelly remains resistant to another source of revenue: bag fees. Other airlines instituted the fees a year ago, but Kelly said customers gravitate to Southwest because there aren’t “hidden” fees.
“It only takes one customer to pay for about 10 bag fees,” he said.
Ann Schrader: 303-954-1967 or aschrader@denverpost.com
