Southwest Airlines takes another look at 2024 flight schedule, post-pandemic travel needs

Dallas-based Southwest Airlines is reevaluating its 2024 schedule as it adjusts to the post-pandemic demand for flying.

Southwest Airlines CEO Bob Jordan said although the network is mostly restored, “it has not yet been optimized.” The carrier is working to change schedules and routes, get more planes from Boeing and staff to better reflect the changing environment, he said.

“The demand environment, especially for leisure travel, continues to be resilient as we have seen solid bookings throughout the busy summer travel season,” Jordan told investors on Thursday.

Because business revenues are not back to pre-pandemic levels, Southwest is revisiting its 2024 flight schedules to reflect the changes in travel patterns.

Those changes won’t likely come until the carrier publishes its full schedule by spring and beyond “that reflect where our customers are traveling and when they’re traveling, including time of day and day of week,” said chief commercial officer Ryan Green.

Airlines including Southwest and Fort Worth-based American Airlines have noted how work patterns have changed and upended the once-predictable patterns for business travelers. Early Monday morning trips and late afternoon returns have been replaced by blended long weekends.

Even among business travelers, many are stepping outside of traditional corporate booking platforms to make their own travel arrangements, American Airlines chief commercial officer Vasu Raja said during that company’s second-quarter earnings call last week.

Employers have looked to move to virtual meetings online to replace short daily or overnight trips.

“We currently expect overall corporate travel to have a modest underlying trend improvement and we expect to continue our gains in industry market share,” Green said. “Overall, however, we expect corporate travel demand will remain lower than leisure for the foreseeable future, particularly compared with pre-pandemic.”

Jeff Windau, senior equity analyst at Edward Jones, said there’s strong growth opportunities present for Southwest.

“It’s just challenging, from quarter to quarter, but in the longer term, we believe they maintain that good operational focus and that they’ll be able to, again, manage through some of these near-term headwinds,” Windau said.

He said there’s no surprise that business travel hasn’t fully rebounded, but passengers will gravitate to Southwest for the efficiency and attractive pricing.

Of course, changing schedules and fleet plans only works if there are pilots to fly those planes.

Southwest is still working on a deal for its 9,000 pilots represented by the Southwest Airlines Pilots Association. Its competitors, Delta Air Lines, American Airlines and United Airlines, have all secured or presented tentative agreements to its pilots. United was the latest, which set a new industry standard for pay, and ultimately made American’s pilots revisit its tentative agreement with the company to match benefits and wages.

Southwest’s pilots asked federal mediators to release the union from mediation, putting the work group one step closer to striking.

“We want to make progress well ahead of any of those, but there’s no threat of an imminent strike or anything like that,” Jordan said. “There are many steps that would have to occur first. We have a desire to get all of our contracts closed up, obviously including that with our pilots and get them taken care of there.”

Attrition of pilots has also been a large topic of conversation within the union, as the carrier still does not have an agreement and could lose pilots to competitors. Southwest planned to hire 1,700 pilots this year and is still in line with that plan, Jordan said.

“The attrition is not a surprise given this is the hottest market for pilots, I believe, in history,” Jordan said.

The carrier’s stock price fell after warning of higher-than-expected costs, according to Bloomberg, and adjusted profit was $1.09 a share in the period. Southwest said unit revenue declined 8.3% in the last quarter and fuel costs were higher than expected.

Southwest reported a record quarterly operating revenue of $7 billion. The carrier operated a record number of flights and carried a record number of customers, achieving a completion factor of over 99%, according to Jordan.