The Atlanta Journal-Constitution
Struggling Southwest cuts back flight schedule again
With costs rising, airline not expecting to be profitable this quarter.
Southwest Airlines has trimmed its flight schedule for the second time since August, cutting back on fourth-quarter flying as it struggles to hire enough workers and recover from customer anger over widespread delays.
Fourth-quarter capacity will decline 8% from pre-pandemic levels in 2019, compared with a previous plan for a 5% drop, the Dallas-based carrier said Thursday as it released third-quarter financial results. Southwest’s December flying will be about 12% lower than it was two years ago, following “aggressive” expansion in the third quarter.
The airline doesn’t expect to be profitable this quarter as seat-permile costs rise as much as 12%,
Southwest said. Higher labor rates and airport costs, stepped-up hiring, employee incentives for coronavirus vaccinations and lower productivity are driving up the measure, an industry gauge of efficiency.
The decision to pare service highlights the difficulty that Southwest and other carriers have had adding workers since the summer, when demand surged more than expected after COVID-19 restrictions were lifted. Southwest says it is facing significant competition from industries such as retail and parcel shipping in trying to lure entry-level employees.
“We have reined in our capacity plans to adjust to the current staffing environment, and our on-time performance has improved accordingly,” CEO Gary Kelly said in a statement. “Our 2022 capacity planning reflects more conservative staffing assumptions as well, all compared to historical norm.”
Southwest slipped 0.3% to $49.30 before the start of regular trading in New York. The shares advanced 6.1% this year through Wednesday, while the S&P 500 Airlines Index gained 6.6%.
The airline has been contending with unhappy customers whose travel was disrupted by thousands of flight cancellations over several days early this month. The mess, which reduced third-quarter revenue by $75 million, was partly blamed on crews being stretched too thin when weather and air-traffic control issues grounded planes. Southwest previously culled thousands of flights after employees complained about being overworked during the summer.