Employee separations could cost Southwest USD 1.7bn

Southwest Airlines has announced employees are being told that layoffs are not imminent, however, the carrier has to triple its traffic to become profitable, the company said.

Although Southwest Airlines will not be laying off workers, over 17,000 employees will leave the company at a cost of USD 1.7 billion.

To become profitable again, the airline needs to vastly increase the number of passengers aboard flights. The executive said the airline is losing USD 20 million per day, and profitability won´t come until they can triple their current traffic load.

In planning for the worst case scenario, Southwest has asked employees to consider taking an extended time off package the airline is offering to conserve cash. The 17,000 employees that are either leaving the company outright or taking extended time off will cost the airline USD 17 billion in exit fees.

Among the global chaos, Southwest said is sees the Boeing 737 MAX as part of its long-term strategy. Southwest currently has 34 737 MAX-8 airframes in its fleet, and previously stated they hoped to fly them again by the end of the year.