Southwest Airlines reaches agreement in principle with US government on CARES Act payroll support

Southwest Airlines Co. (NYSE: LUV) has announced it has reached an agreement in principle with the United States Department of Treasury about the general terms expected on the CARES Act Payroll Support Program, the company said.

Under the agreement in principle, Southwest will receive the funding support necessary to protect the jobs of its more than 60,000 employees through at least September 30, 2020, with the fundamental goal to maintain the carrier´s unprecedented 49-year history absent a single involuntary furlough.

The Company´s expected disbursements under the program total more than USD 3.2 billion, consisting of more than USD 2.3 billion in direct payroll support and a nearly USD 1 billion unsecured term loan. The loan is expected to have a 10-year term with low interest rates and may be repaid at any time prior to maturity at par. The loan is expected to include approximately 2.6 million warrants issued to the US Department of Treasury.

The program includes certain conditions, such as: prohibitions against involuntary furloughs and reductions in employee pay rates and benefits through September 30, 2020; the elimination of share repurchases and dividends until September 30, 2021; and limits on executive compensation until March 24, 2022.

Dallas-based Southwest Airlines Co. (NYSE: LUV) has a customer base that topped 130 million passengers in 2019. In peak travel seasons during 2019, Southwest operated more than 4,000 weekday departures among a network of 103 destinations in the United States and 10 additional countries.

Southwest Airlines reaches agreement in principle with facilities maintenance technicians

Southwest Airlines Co. (NYSE: LUV) has reported negotiators reached an agreement in principle for the company´s facilities maintenance technicians, the company said.

Terms of the five-year deal include a complete set of work rules, a wage scale, and a ratification bonus.

The agreement in principle is subject to final review by AMFA´s national executive committee before it is submitted to its members for a vote. A date for a ratification vote will be determined in the coming days.

Dallas-based Southwest Airlines serves more than 100 million customers annually. with 3,900 departures a day during peak travel season across a network of 98 destinations in the United States and seven additional countries.