Southwest CEO says airline hopes to avoid furloughs, dropping cities
Southwest Airlines is preparing for the worst but hoping for the best as the novel coronavirus pandemic continues to all but wipe out air travel demand.
The Dallas-based carrier has slashed its schedules by half and fortified its balance sheet with additional cash as social distancing and shelter-in-place orders have kept all but those who need to travel out of the skies. The moves aim to bridge what could be months — or years — until travelers come back in significant numbers.
But Southwest CEO Gary Kelly, while admitting he does not know when demand will return, aims to keep the airline's employee ranks and route map intact through to the other side.
"We're not downsizing the airline," Kelly said in a video posted on the carrier's blog Monday. "We don't want to furlough employees, we don't want to ground airplanes [and] we don't want to close cities. All of that depends on passengers and air travel returning."
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Kelly's comments come as other airline CEOs, including Ed Bastian at Delta Air Lines and Oscar Munoz at United Airlines, have warned staff that their respective carriers will likely emerge from the COVID-19 crisis smaller than when they went in. And by "smaller," both leaders referred to the size of their respective airline's operations and staffing.
Daily passenger numbers in the U.S. have plummeted to levels unseen since the 1950s. The Transportation Security Administration (TSA) reported screening just 90,510 people on Sunday, March 12 — just 4% of the number who passed through checkpoints on the same weekday a year ago.
"[This] is the biggest crisis we have ever had in front of us," is how International Air Transport Association (IATA) director general Alexander de Juniac described the impact of coronavirus pandemic on global airlines earlier in April.
Related: Delta CEO says industry nears 'bottom' of coronavirus crisis, recovery a ways off
Southwest has the distinction of being the only major U.S. airline that has never furloughed or laid off staff, airline president Thomas Nealon told the Global Business Travel Association on Monday. A fact that he said has created a sense of "family" among the Southwest ranks.
The carrier, while not involuntarily reducing its ranks, has asked employees to take voluntary leave. It has also applied for some of the $25 billion in grants available for staff compensation under the U.S. government's coronavirus stimulus package, officially known as the CARES Act.
Southwest has suspended all of its international flying. The airline hopes to resume some limited service to Cancun (CUN) and Los Cabos (SJD) in Mexico, and Montego Bay (MBJ) in Jamaica on May 21. The balance of its international network is due to resume on June 27.
The carrier even plans to begin new service between San Diego (SAN) and Hawaii on June 7, as planned.
Related: Southwest Airlines suspends international flying Sunday
In one maybe unsurprising move given the pandemic, Southwest will "probably" move forward with its aircraft retirements as planned in 2020, said Kelly. The airline was previously working to cut the number of aircraft it retired by at least half when the Boeing 737 MAX grounding was the biggest issue it faced.
Southwest plans to retire 16 of its 506 737-700s this year, its 2019 annual report shows.
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