Southwest Airlines backtracks on a full schedule by year-end as recovery stalls

Jul 23, 2020

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

It was less than two months ago when Southwest Airlines unveiled plans to fly a nearly full schedule by December in an effort to grow out of the coronavirus pandemic as it has past recessions.

Now, those plans are fizzling like a dying sparkler on the Fourth of July.

Dallas-based Southwest plans to fly about 25% less than it flew at the end of 2019 by December, CEO Gary Kelly said during the airline’s second quarter earnings call on Thursday. The flight reductions are still in the works and will be loaded in its schedule over the coming weeks.

Sign up for the free daily TPG newsletter for more airline news!

“And, if demand is like it is today, that won’t be enough,” Kelly added in a dour note on the outlook. “We’ll have to be smaller.”

The recovery in air travel has unequivocally stalled. Every carrier from Delta Air Lines to United Airlines — and now Southwest — have acknowledged that when the resurgence of COVID-19 was leading the news cycle around the July 4 holiday, Americans stopped buying tickets to travel.

Data from trade group Airlines for America (A4A) shows net passenger bookings — new reservations minus cancellations — for U.S. domestic travel have held steady at down roughly 80% year-over-year since the beginning of July.

Related: Southwest Airlines adds 11 new routes, plans to resume a full schedule by year’s end

Southwest posted a rare quarterly loss during the three months ending in June. The airline lost $1.5 billion before special items during the period — a number that was better than the losses at some of its larger competitors — but was a fraction of its usual size, flying just 45% of what it flew a year ago.

The carrier will be a little bigger during the three months ending in September. Southwest president Tom Nealon said Thursday that it plans to fly about 70% to 80% of what it flew last year during the same period, but he noted that they “have more work to bring it down further.”

Despite having to delay plans to resume a full schedule, Southwest plans to continue serving all of the U.S. cities on its route map. This includes Hawaii, where it continues to serve five cities — though its only connection to the U.S. mainland is between Honolulu (HNL) and Oakland (OAK).

Related: Why the U.S. needs a federal mandate on masks now more than ever

Passenger and crew safety from COVID-19 remains a top priority for Southwest. The airline will implement stricter rules on wearing masks onboard its Boeing jets next week in response to what Nealon said were “too many exceptions to the policy.”

Southwest has also extended caps on the number of seats it will sell on any given flight by a month to the end of October. The caps are designed to allow for a semblance of social distancing onboard.

In addition, Kelly said the nearly 17,000 staff that took voluntary early departure packages or extended unpaid leave are enough to allow it to avoid pay cuts or furloughs through the end of the year.

Related: Southwest staff love the carrier so much, more than 25% are willing to leave to help it survive

But Southwest’s leadership team is not under any impression that they — or the airline industry — is out of the coronavirus woods yet.

“We know enough now that we’ve got a long, long way to go,” said Kelly calling the recovery a “long, saw-toothed slog.”

Related: Southwest Airlines moves to new digs at Nashville with opening of Concourse D

Featured image by John Gress Media Inc/Shutterstock.

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs up to two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. Payment of the government imposed taxes and fees of no more than $80 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA PreCheck® after you apply through any Authorized Enrollment Provider. If approved for Global Entry, at no additional charge, you will receive access to TSA PreCheck.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
17.24%-26.24% Variable
Annual Fee
Balance Transfer Fee
Recommended Credit
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.