Southwest Airlines on full-court press to win back biz flyers, one airport tour at a time

Nov 13, 2020

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Zoom meetings and virtual conferences have become the new norm during the pandemic. Still, critics say those virtual forums fail to deliver the same punch as in-person meetings.

Even a corporate giant like Southwest Airlines is working to overcome that hurdle, something that’s especially important as it tries to lure back the business travelers that are key to its long-term success. Executives have found limited success in virtually explaining COVID-19 safety precautions to someone debating whether to allow staff back on the road while they themselves are tucked away in a home office.

“We can send them all of the communication on our Southwest Promise,” said Dave Harvey, vice president of Southwest Airlines‘ corporate travel division Southwest Business, told TPG on a recent rainy November morning. “But you can’t replace traveling through the airport, [experiencing] that end-to-end customer journey, with them.”

Harvey was about to take a group of top local corporate customers around its Baltimore/Washington (BWI) base on the latest in a series of 30 airport tours across its network. On display was the “Southwest Promise” — the airline’s name for its coronavirus safety precautions that begin at the ticket counter and continue all the way through the trip to baggage claim.

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Southwest Airlines executives Dave Harvey (left) and Lee Feldman (national accounts manager, right), and  Ken Rohrer of FTI Consulting (center) at the beginning of a tour of the Southwest Promise at Baltimore/Washington airport on Nov. 11. (Image by Edward Russell/TPG)

 

Americans have steadily trickled back onto planes since their numbers hit bottom in April during the early days of the coronavirus pandemic. After falling by as much as 96%, Transportation Security Administration (TSA) screenings are now down roughly 65% compared to the same period in 2019.

But those who are traveling are largely doing so for socially-distant holidays or to visit family. Corporate flyers who generate an outsize proportion of airline revenues are still largely grounded.

“It’s very troubling that in the corporate segment, [bookings] were down 86%” in early November, said Airlines for America (A4A) chief economist John Heimlich during a briefing on Thursday. “That has a disproportionate affect on our revenues. The financial pain is actually even worse than the [traveler] volumes may suggest.”

Related: Airlines brace for busy Thanksgiving, urge travelers to fly even as COVID surges across US

At BWI, Harvey and other Southwest leaders showed representatives of some Baltimore’s big corporate travelers all that the airline is doing to keep flyers safe. Check-in is largely touchless at kiosks with plexiglass barriers between agents and customers when additional assistance is needed. Similar barriers have been installed at gate and customer service podiums, and travelers are required to wear masks throughout their journey.

“Everything here is multi-layered, there is no silver bullet,” Harvey said of Southwest’s approach to COVID safety.

For example, the carrier wants the TSA to begin temperature checks of all travelers at security as yet another layer of protection. Southwest is trialing such checks at its Dallas Love Field (DAL) base and has been sharing the data with the federal agency, said Harvey. He thinks  it’s just a “matter of when” such screenings expand nationwide.

TPG Q&A: Southwest CEO Gary Kelly chats about his legacy, new cities and change fees

A Southwest Airlines Boeing 737 is serviced between flights at Baltimore/Washington airport. (Image by Edward Russell/TPG)

 

But even with the layers, many of the travel managers were skeptical of returning business flyers to the road as coronavirus cases surge across the U.S.

“You run into crazy people everywhere,” Amy Page, director of travel and expenses at Johns Hopkins University, told TPG during the tour. While she thinks Southwest is doing a good job making its planes safe, the risk of COVID on the ground are too much for her to begin sending people out on university-related travel yet.

The latest Centers for Disease Control and Prevention (CDC) data shows new COVID-19 infections set a new daily U.S. record of 143,408 on Nov. 11. Case numbers have risen steadily since mid-September and the public health authority has warned against small gatherings ahead of the Thanksgiving holiday.

Related: Southwest Airlines adds Sarasota, makes it 10 new cities in coronavirus expansion

Jean Knutson, a corporate travel and expense manager at Bowie, Maryland-based medical data firm Inovalon, thinks the U.S. needs a national strategy to combat the virus and streamline the various state-by-state rules. That would help alleviate concerns about on-the-ground  risks — or from the “Uber to the hotel” — to the company’s business travelers.

Inovalon has resumed sending some of its normally “thousands” of travelers out on the road again, but at levels of just about 5% of normal, she told TPG during the tour.

In October, Southwest president Tom Nealon said that travelers from 90% of the airline’s top 200 corporate clients had resumed flying during the third quarter. However, this was at a “dramatically reduced level.”

Related: State-by-state guide to coronavirus reopening

A Southwest employee demonstrates an electrostatic sprayer in the cabin of one of its 737s. (Image by Edward Russell/TPG)

 

Southwest’s decision to remove seating caps on its flights did not concern the travel managers at BWI. The airline will remove the restrictions that effectively kept each middle seat open on Dec. 1. It points to data that flyers and staff are safe onboard planes with the other preventative measures that are in place, including air filtration and wearing masks.

However, the move is also seen as needed to return the airline to profitability. The seating caps hit Southwest’s pre-tax revenues by $40 million in September and October, and are forecast to take a further up to $60 million bite in November.

Travelers will not be surprised by a full flight when they arrive at the gate. Southwest will notify every flyer booked on a flight that is more than 65% full 72-hours before they travel, said Harvey. Flyers will be offered multiple alternative travel options if they prefer a less full flight.

Related: Southwest Airlines won’t block middle seats for Christmas flights

Southwest uses an electrostatic sprayer on each of its 737s every 30 days. (Image by Edward Russell/TPG)

 

Showing of its latest safety measures against that backdrop is what’s driving Southwest’s airport tours. If the airline can alleviate one aspect of its corporate travelers’ concerns — the experience at the airport and on the airplane — that’s one more step towards a return in business travel. And a step that Southwest can control when things like local COVID infection rates remain well outside its purview.

Southwest is taking every precaution it — and its customers — deem necessary to keep people safe. In addition to mandating masks, the airline is using an electrostatic sprayer on the cabin of each of its Boeing 737 jets every 30 days. According to Southwest, the disinfectant spray coats cabin interiors and acts as a foundation to kill COVID droplets. It lasts for up to 90 days.

In addition, Southwest wipes down each seat-back tray table and cleans lavatories between every flight and cabins are given a more thorough cleaning every night.

Related: Southwest Airlines is seriously considering the Airbus A220 for its next new jet

The airline does not wipe down armrests or other high-touch surfaces in the cabins of its 737s after customer feedback indicated these were of less concern than the tray tables, executives said on the tour.

The tour ended in the new Concourse A extension that BWI has built for Southwest. A soaring and expansive space, the airline does not anticipate moving into the five new gates until next spring as the airport does some needed taxiway work while flyer numbers remain down.

The gates will come in handy for Southwest as Baltimore is one of its largest bases — or “hub” at any other carrier. The airline plans to expand its map there with new nonstop flights to Miami (MIA) this month and Chicago O’Hare (ORD) in February. The flights come even as its system schedule remains down around 40% compared to 2019.

Related: Does Southwest Airlines have hubs? Yes, but don’t call them that.

Southwest will move into a new five-gate extension of Concourse A at Baltimore/Washington airport next spring. (Image by Edward Russell/TPG)

 

The carrier hopes to capture more holidaygoers by offering a broader network of destinations — the list of additions during the crisis reached 10 with the announcement of Sarasota/Bradenton (SRQ) on Thursday, Nov. 12. And, once travel begins returning to normal, attract more lucrative business flyers to its expanded map.

Whether the Baltimore tour translates into more Inovalon or Johns Hopkins staff on Southwest jets remains to be seen. But Harvey told TPG that the feedback he has gotten from the tours is positive with most travel managers saying they recommend that their employers resume some travel after the walk throughs.

“Our expectation is that domestic business travel will continue to return slowly,” Nealon said in October. “Whether or not business travel returns to 2019 levels in the next two or three years is anyone’s guess… [but] from a Southwest standpoint, there is still a lot of upside for us.”

Related: The Boeing 737 MAX is about ready to return to US skies. Will it make it for the holidays?

Featured image by Edward Russell/TPG.

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