Southwest expanded like wildfire during 2021. Here's its plan for 2022.
Southwest put its name on the map in 2021. Literally.
The airline expanded to 18 new markets in 2021, ranging from new but unsurprising destinations like Mexican resort towns, to unexpected markets like Syracuse, New York (SYR), and Bellingham, Washington (BLI).
The airline's growth was fueled partly by the return of capacity as the Boeing 737 MAX was cleared to return to passenger service, along with reduced demand for travel overall allowing the airline to reduce frequencies on some routes and redirect that capacity to new markets where Southwest is strategically bolstering its presence in existing markets – like Austin, Texas (AUS).
But the airline flew too close to the sun.
Travel demand surged back faster than expected, and Southwest — already short-staffed due to pandemic-driven early retirements, buyouts and leaves of absence — was left stretched too thin. It added as much capacity as possible for the staffing it had to maintain its network, but eventually reached a tipping point in October, when a series of relatively minor events — afternoon thunderstorms around Orlando, short-staffing at an air traffic control center in Jacksonville, a coastal military exercise — coalesced to cause the airline's network to collapse.
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Southwest canceled more than 1,800 flights over a weekend, with thousands more delayed, racing to get planes and crews back into position as days ticked by and stranded passengers fumed.
With travel demand expected to recover and grow even further in 2022, the airline plans to hit the brakes on expansion, Southwest chief commercial officer Andrew Watterson told TPG during an interview in Denver earlier this month, where the airline was celebrating 15 years of operations in the Rocky Mountain hub.
Instead, Southwest plans to shift its focus to servicing the network it has already.
"For next year and the year after, the No. 1 objective is to restore the network we had pre-pandemic," Watterson told TPG. "Especially in our business-type routes, because those are the ones that have less frequency than they do before."
In some ways, the pandemic offered a chance to accelerate the airline's expansion plans, hence the plethora of new routes this year.
"What we've done," Watterson said, "was go into a lot of new stations to broaden our network. And as a consequence, what we did was pull forward a lot of new cities we would have done over the [next several] years."
While Watterson won't say "never," Southwest's further expansion plans are likely to be muted for the next few years, since it jumped on the expansion ahead of schedule.
"We're not necessarily looking for new geographies. Not saying there'll be zero, because something could happen, but right now that is well down on our priority list."
According to Watterson, that was already the plan before Oct. 8. But the flight-cancellation episode of that weekend put the need to bolster the operation and reassure customers front and center — particularly as the airline seeks to expand its base of business travel customers, who need a degree of reliability and flexibility before they'll commit to flying the carrier.
"Customers value time, and that's why frequencies are a great offering for us," Watterson said.
One thing that will help, Watterson said: new planes.
Elsewhere in Austin: How airline route maps changed in 2021, and what to expect for 2022
The airline is scheduled to take delivery of 114 planes in 2022. Of those, more than 70 will go towards growing the size of fleet (the rest will replace aircraft that are due to retire).
The new direction comes as a new CEO is due to take over. Longtime Southwest CEO Gary Kelly will retire in early 2022 and will be replaced by Bob Jordan, currently the airline's executive vice president of corporate services.
The shift in focus from this year's expansion to next year's rebuilding of frequencies does not reflect the regime change, Watterson stressed.
"I would say that Bob and Gary have worked together for so long and so well that internally, it's really quite seamless."
Instead, it's the natural result of a year of aggressive expansion, condensing potentially years of building plans into just 12 months.
Southwest has gotten where it wants to go. Now it just needs to make sure it can keep getting there — even when there's bad weather in Florida.
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