The airline is focusing on restoring previous destinations after experiencing challenges arising from expansion in recent years.
DALLAS — The video at the top of this page originally aired on May 12, 2022. The article below originally appeared in the Dallas Business Journal, a WFAA news content partner.
It seems everyone wants to know where Southwest Airlines Co. next time will fly.
After COVID-19 shut down the airline industry in 2020, Dallas-based Southwest returned with a vengeance when it resumed flying. In late 2020 and throughout 2021, Southwest entered 18 new markets. According to data from Cirium, the airline will fly to 20 airports in the fourth quarter that it did not visit during the same period in 2019.
Many of those markets were all-new destinations for Southwest (NYSE:LUV), such as Palm Springs, California and Myrtle Beach, South Carolina. Others were expansions in cities Southwest already served, such as Chicago and Houston. For example, Southwest already served Chicago Midway International Airport and then added O’Hare International Airport.
As Southwest enters the holiday season and prepares for 2023, carrier executives remain focused on network recovery and ensuring operational reliability rather than new market expansion.
“While we expect healthy capacity growth next year, almost all of it will return to key markets in the Southwest,” CEO Bob Jordan said during a conference call with analysts on Thursday. “These are markets that we have borrowed from to fund new airport expansions during the pandemic, and as business demand improves, we have opportunities to rebuild them.”
Southwest expects its route network to be about 90% recovered by the summer of 2023, compared to 2019 flight levels in pre-pandemic markets, and to be fully recovered by the end of the year. Jordan said restoring existing markets to full capacity represents “lower-risk growth” because they are places where Southwest already tops in market share and has built a customer base.
“We see that as something very different from putting all the services in new markets that then have to be developed,” Jordan says.
The focus on restoration and past destinations comes after Southwest has experienced challenges during its expansion in recent years.
Southwest began flying new routes at a time when airlines were just beginning to recover capacity from the pandemic shutdown. However, in the airline industry in general, demand has bounced back and Southwest is no exception. Amid a 2021 staff shortage due to retirements and buyouts, events such as thunderstorms caused Southwest to cancel and delay thousands of flights. The airline also republished its summer schedule in April, resulting in a cut of more than 8,000 flights.
Demand remains strong so far this year. Southwest reported record revenue of $6.2 billion in the second quarter, up 10.6% from the same period in 2019. The third quarter was also the second consecutive period in which Southwest reported earnings and record quarterly revenue. Executives said leisure demand has remained high throughout the year and business travel demand has risen since Labor Day.
However, the challenges remain. The company is still limited by a shortage of pilots, despite the plan to hire 1,200 this year. Overall, Southwest remains on track to grow its workforce by approximately 10,000 employees this year.
Southwest is also facing ongoing delays in Boeing’s deliveries of 737 MAX aircraft. Even if Boeing delivered the planes on time, Southwest would still not have pilots to fly them all due to a training backlog. Southwest expects to close the year with 768 aircraft in its fleet.
“We’re really limited to pilots,” Chief Commercial Officer Andrew Watterson. “Much of what we do for most of next year will be driven by our pilot training capacity, not Boeing’s deliveries.”
Jordan said Southwest wants to avoid republishing schedules and maintain high completion factors with high on-time performance.
So what are some of those markets Southwest will look to recover flights? According to Cirium, among Southwest’s 15 largest airports in Q4 2019, there are still 11 where it is still scheduled to serve fewer flights. The four airports expected to grow over the 2019 period are Denver, Las Vegas, Phoenix and Nashville.
The airports where there is still room for recovery include:
Chicago Midway – scheduled for 18,914 flights in the fourth quarter, down 926 or 4.7%, from the same period in 2019.Baltimore/Washington International Thurgood Marshall Airport – 16,647 flights, down 2,335 or 12.3% Dallas Love Field Airport – 17,138 flights, down 212 or 1.2% William P. Hobby Airport in Houston – 13,228 flights, down 1,283 or 8.8% Oakland International Airport – 9,913 flights, down 826 or 7 .7% Orlando International Airport – 9,423 flights, down 1,217 or 11.4% San Diego International Airport – 9,786 flights, down 438, or 4.3%Los Angeles International Airport – 6,706 flights, down 3,417 or 33.8% St. Louis Lambert International Airport – 9,187 flights, down 842 or 8.4% Hartsfield-Jackson Atlanta International Airport – 8,349 flights, down 1,079 or 11.4% Norman Y. Mineta San Jose International Airport – 8,941 flights, down 186 or 2%
Of course, there are many more airports where Southwest is likely to add flights beyond this list, including Tampa and Fort Lauderdale. But this list is a start.
When Southwest gets back into expansion mode, there’s already been speculation that Southwest will be looking at Canada and or various destinations in South America. But until Southwest has the pilots and fleet it needs to reach new markets, executives will remain focused on tapping into the demand they already know exists.
“We need to continue to restore our operational reliability and we need to get personnel so we can fly our entire fleet,” Jordan said.