Southwest Airlines has announced it will sell every available seat on flights starting December 1, joining United and American in a bid to increase revenue.
The airline had been keeping open middle seats on many flights to enable social distancing among passengers however the company warned on Thursday that until a COVID-19 vaccine was made widely available, passenger traffic would remain fragile.
Southwest referenced recent medical research about the coronavirus showing that the combination of air filtration on airplanes combined with face masks ‘make the risk of breathing COVID-19 particles on an airplane is virtually non-existent.’
It said the practice of keeping middle seats open had bridged it from the early days of the pandemic, ‘when we had little knowledge about the behavior of the virus, to now.’
Southwest announced record quarterly losses over over $1 billion on October 22. The airline also said it would stop the practice of blocking out middle seats [above] starting December 1
Southwest has thus far avoided furloughing employees by asking workers to accept pay cuts
Ridership on US foreign and domestic flights rebounded over the summer after bottoming out during the most severe lockdowns during the spring. Still, US airlines are carrying only a fraction of the passengers they did last year
The Dallas-based company reported a net loss of $1.16 billion, or $1.96 per share, in the third quarter ended September 30, compared with a profit of $659 million, or $1.23 per share, a year earlier.
On an adjusted basis, the company lost $1.99 per share. Total operating revenue fell 68.2% to $1.79 billion.
Southwest ended the second quarter with liquidity of $15.6 billion.
The airline forecast fourth-quarter average core cash burn of about $11 million per day, compared with $16 million per day in the third quarter and $23 million per day in the second.
Now it joins American Airlines in appealing to Congress to extend the Payroll Support Program of the CARES Act, which pumped $25 billion into the airline sector, and expired this month.
As House Speaker Nancy Pelosi (D-California) negotiates with Treasury Secretary Steven Mnuchin on the terms of a second COVID relief bill, Senate Democrats on Wednesday blocked a proposed $500 million Republican package they saw as insufficient.
‘We urge our federal leaders to pass an economic relief package that includes a clean, six-month extension of the Payroll Support Program (PSP) to further protect jobs and crucial air travel,’ Southwest Chief Executive Officer Gary Kelly said.
The four largest carriers in the US have shed about 150,000 employees this year through voluntary or temporary leave.
For its part, Southwest has thus far avoided furloughs by asking its employees to take pay cuts.
Kelly told employees in a memo earlier this month that company leaders and non-contract employees would face a 10 percent salary hit, CNN reported.
Unions representing Southwest workers would be asked to make concessions as well.
American Airlines announced third-quarter losses of $2.4 billion on October 22. The airline started to furlough 19,000 workers earlier in the month after Congress allowed airline payroll relief to expire
American and Southwest both reported increasing revenues and lower rates of cash burn, but both airlines are far from reaching a break-even point
Without an extension to the airline relief package, the airline industry in the US began furloughing 50,000 workers this month.
AA posted $2.4 billion in quarterly loss and announced on October 1 that it would furlough 19,000 employees.
American Airlines Chairman and CEO Doug Parker said a proposed extension of the PSP enjoys ‘enormous’ bipartisan support, but the failure of Republicans and Democrats to agree on a broader COVID relief package has blocked it.
‘Elections matter, but there’s nothing polling higher than a COVID relief stimulus package,’ Parker told investors on a call Thursday.
American burned about $44 million a day in past three months, compared to $58 million in the second quarter.
Both companies forecasted lower burn rates for the fourth quarter.
Demand for air travel has plummeted amid the global pandemic. April saw just 3.2 million passengers on US foreign and domestic flights, compared to 76.7 million in April 2019.
Even as US ridership rebounded slightly over the summer, US airlines served in July fewer than a third the passengers they did in July 2019, according to federal statistics.
Carriers have cut flights and routes in response. American Airlines reported Thursday its system capacity would be slightly more than 50 percent what it was over the same period last year.
Airline revenues have rebounded since the depths of the lockdowns this spring, but break-even is still far off.
American Airlines announced that it expected its system capacity in the fourth quarter of 2020 would be just over half what it was in the same period last year