Southwest Airlines may have to force cuts in pay and benefits to avoid involuntary furloughs if air travel doesn’t improve dramatically in the coming months, CEO Gary Kelly said in a video to employees Thursday.

Dallas-based Southwest has suspended more than half of its flights and plans to drop more in the coming weeks. Kelly said the airline will lose more than $1 billion in revenue in April because of the COVID-19 downturn.

“If things don’t change dramatically over the May-June-July time periods, we’ll have to prepare ourselves for a drastically smaller airline,” Kelly said. “Life can be very humbling and as I’ve said several times, we’ll have to be prepared for every possible scenario.”

The usually upbeat Kelly delivered the message to employees as leaders at other airlines have warned about painful reductions in the months ahead with air travel expected to be diminished for months, if not years.

Delta CEO Ed Bastian told employees this week that it could take two to three years for the industry to recover.

“We don’t know when it will happen, but we do know that Delta will be a smaller airline for some time, and we should be prepared for a choppy, sluggish recovery even after the virus is contained," Bastian said.

Southwest has been slower to cut flights than other airlines but is still operating at a fraction of its regular size. Thousands of its employees have taken voluntary time off, often unpaid, and the airline has parked “hundreds of planes” to help reduce costs.

“Our traffic is virtually zero,” Kelly said.

Southwest approached union representatives last week to discuss ways to cut costs and increase revenue while air travel is depressed. Union leaders took the discussions as a threat that pay and benefit concessions could be a possibility.

Federal payroll grants and loans ensure the company can’t involuntarily reduce pay and headcounts between now and Sept. 30. Southwest took $3.29 billion in federal grants and loans.

“We’ll likely have to make sacrifices to survive this,” Kelly said. “The imperative here is to survive. Many companies will not survive this and it may be through no fault of their own. But Southwest is too precious to lose.”

Southwest has never furloughed or laid off employees since it started flying 49 years ago. It’s a streak that Kelly said he would like to avoid. But he also warned that the COVID-19 pandemic is the biggest financial challenge the airline and the industry have faced in decades.

“Some companies have already conceded that they’ll have to downsize or worse, file for bankruptcy,” Kelly said. “But as I’ve told you many times, I can’t promise or guarantee those things won’t befall us. What I can promise is that we will do everything that is humanly possible to avoid those outcomes.”

Cutting pay or benefits would have to be negotiated with union leaders and voted on by general membership. It’s uncertain if things will get that bad, but Kelly said it may be the only option to avoid furloughs.

“To preserve precious jobs of our coworkers, our friends, our family, I would prefer we all take a small and hopefully temporary pay cut,” he said.

Kelly also said he would be the first to take a pay cut if employees do and said he would be willing to work for free. Kelly has already taken a 20% cut to his base salary.

But union leaders said the basic problem is the company has far more employees than it needs right now for the number of passengers flying. The company has more than 62,000 workers. On Wednesday, only 98,000 passengers flew in all of the United States, according to government statistics.