Southwest Airlines plans to offer its pilots reduced hours and, in effect, monthly pay, two people familiar with the matter said, as it grapples with higher costs and overstaffing due to delays in aircraft deliveries from Boeing.
The Dallas-based airline, which operates an all-Boeing fleet, has been¬†reeling from the U.S. planemaker’s ongoing safety crisis. Last week it warned of a hit to earnings as it expected to receive just 20 Boeing aircraft this year, less than one-fourth of its original plans.
Southwest has called the delays “significant challenges” for this year and next as they have forced it to moderate its growth plans. Reduced hours for pilots will help lower Southwest’s salary bill without needing to resort to furloughs, the sources said. It is also intended to ensure Southwest’s pilots meet the U.S. Federal Aviation Administration’s (FAA) requirements to stay in the cockpit, allowing the company flexibility to ramp back up operations when required, they added.