Southwest Airlines CEO Gary Kelly will take a 10 percent pay cut amid an "alarming" drop in bookings caused by the spread of coronavirus (COVID-19).
"The velocity and the severity of the decline is breathtaking," Kelly told employees in a video message that was reviewed by The Wall Street Journal. "There is no question this is a severe recession for our industry and for us, and it's a financial crisis."
Kelly called the COVID-19 outbreak the biggest challenge the industry has faced since 9/11, noting that "it may be worse."
Citing the most recent proxy filing, The Journal reported that Kelly's 2018 salary was $750,000 and his total compensation was $7.73 million.
Kelly had some good news to share with employees on Monday, pointing out that low fuel prices could save the airline $1 billion or more this year if they stay that way. Nonetheless, with reduced bookings leading to a potential $300 million in lost revenue this month alone, Southwest is eyeing new ways to reduce operating costs such as putting a freeze on hiring non-frontline workers.
"I can't promise you we won't have to ground airplanes and furlough employees. I can promise you it will be the last thing we do, not the first," Kelly added.
Southwest recently implemented enhanced cleaning procedures on its aircraft to combat the potential spread of illness.
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