Southwest Says No Furloughs Planned in Boeing 717 Buyer Search

Southwest Airlines Co. (LUV) has no plans to furlough pilots and flight attendants as it searches for a buyer for 88 Boeing Co. (BA) 717s acquired when it purchased AirTran Holdings Inc. in May, Chief Executive Officer Gary Kelly told employees today.

Concerns that jobs would be cut arose amid reports Southwest had reached an agreement to shed the 717s, most of which are leased from Boeing Capital Co., a unit of Boeing. Leases on the planes run as long as through 2024, and Dallas- based Southwest has said it’s working with Boeing to find a new owner for them.

“We’ve had no discussions, no talk, no hint with any of you about job furloughs,” Kelly said in a weekly phone message to employees. “That means we would have to shrink this company and we have absolutely no plans to do so. We have a lot of work under way to put Southwest in the position where we can grow this company and add jobs, not subtract jobs.”

Southwest is searching for “an opportunity to place the 717s” with another airline, Kelly said, declining to comment on reports it had already reached a deal. Southwest will retire 150 planes during the next five years and replace them with new aircraft, holding its fleet at about 700, he said.

Kelly reiterated that the airline is preparing for future flights to Hawaii, Alaska and close-in international routes. The carrier will add the first two larger Boeing 737-800s to its fleet beginning in April.

To contact the report on this story: Mary Schlangenstein in Dallas at {maryc.s@bloomberg.net}

To contact the editor responsible for this story: Ed Dufner at {edufner@bloomberg.net}

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