The airline industry, as well as the entire world, stopped once the virus hit in March 2020.
Ultimately, some flights were available in 2020 with enhanced safety precautions, but relatively few people felt willing to take the risk. So it was not surprising when the International Air Transport Association confirmed That 2020 was the worst year ever for the industry.
Demand rose quickly again once vaccines were available in 2021, but there was no smooth sailing (or smooth flying) from there, Where the luggage gets lost Flying is more expensive than ever. With ticket prices up 25%due to factors ranging from inflation To a shortage of workers, to a rise in fuel prices.
But in its last earnings call, Southwest (love) – Get the Southwest Airlines report Announce a change that will delight customers, while also indicating that there is more work to be done.
What change has the Southwest brought about?
One of the biggest problems travelers (and in fairness, airlines) face is Is that flight cancellations are becoming more frequentEspecially this summer. Hundreds of flights were canceled over the Fourth of July weekend, for example.
No airline understands this headache better than Southwest, which had to cancel Over 1,000 trips last October.
The reasons for these cancellations vary. Sometimes the weather is bad, an eternal problem.
But the main factors these days are high fuel prices, coronavirus case rates, air traffic control issues and staff shortages. In particular, the airline industry is struggling to find enough pilots. This is because many pilots have retired or take a vacation During the pandemic while many pilots did not leave They suffer from record levels of fatigue.
When flights are canceled, customers They are legally entitled to a refund. But many customers choose to get credit for a future flight instead.
The problem is that there is often a time limit on when this credit can be used, which doesn’t always work with people’s schedules. This is also the case that people’s travel plans change for all kinds of reasons, and they may not be able to use that travel credit during the year.
But on the second-quarter earnings call, Andrew Waterson of Southwest, executive vice president and chief commercial officer, announced that travel credits would no longer expire.
He said, “We are also canceling the expiration date on any valid and not currently expired flight credits, including travel credits that were issued where customers changed their travel early in the pandemic and were supposed to expire next September.”
Go to follow
“We are renowned for providing industry-leading flexibility across the board, and customers tell us that it is one of the main factors that differentiate our brand. Repeat purchases by engaged customers are the cornerstones of our business model and our success. Our customer research and feedback tells us that flexibility is becoming more and more important.” customers over the past two years.
Southwest is looking for more pilots
Elsewhere on an investor call, CEO Bob Jordan said that in the second quarter, “operating revenue increased 13.9% compared to the second quarter of 2019 to a record quarterly high of $6.7 billion,” adding, “It’s just an amazing turnaround from last year.” And I don’t remember just a quarter of a year ago.”
He attributed this boost to the continuous increase in demand, which appears to be rising even with jet fuel prices and labor shortages which means that aircraft supplies have not been able to keep up, which has led to higher airfare costs.
Jordan hit an optimistic note to investors, while still admitting that the airline industry is not out of danger yet.
“I will admit there is a lot of noise outside now. We all seem to know someone who has this latest type of coronavirus, inflation pressures are real, and they are worried about the possibility of it happening. Recession,” He said.
“Consumer and business sentiment is down, and there are data points out there that could indicate early signs of slowing. But so far, demand is still strong, and we haven’t seen material impacts on our business.”
Jordan indicated that “we currently expect to achieve profits in the third and fourth quarters and in the whole of 2022.” He also said the onboard experience is on the rise, with the company reaching “pre-pandemic staffing levels in May 2022, which is just a milestone.”
The company’s main goal at the moment is to secure enough pilots, which has been a struggle. With more than 640 pilots retired during the pandemic, there are fewer pilots available to help train new recruits.
Southwest plans to hire 10,000 new employees this year. Chief Operating Officer Mike van de Ven said the company’s first step last year was to “rebuild and restart the staffing machine,” and they have already hired 7,000 employees since last year,
“About 75% of this hiring was in airport operations and about 20% in flight crews. We will continue to hire,” he said.
Additionally, van de Ven said the company plans to “build some staff cushion and buffers into the aviation environment we all find ourselves in” to reduce the number of flight cancellations.
“We continue to be affected by coronavirus disease and a higher level of inactive employees. Our disease rates remain high in some of our work groups.”
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