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Southwest CEO says airline hopes to avoid furloughs, dropping cities

April 13, 2020
4 min read
Southwest CEO says airline hopes to avoid furloughs, dropping cities
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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.”

Get Coronavirus travel updates. Stay on top of industry impacts, flight cancellations, and more.

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

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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.

Featured image by (Photo by John Gress Media Inc/Shutterstock)

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TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
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10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
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Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023