docav8tor

CEO Gary Kelly: Southwest Airlines has ‘hundreds of airplanes of growth still available’

The Dallas-based carrier has added 17 new destinations since the COVID-19 pandemic and could need even more planes as travel recovers to fill out schedules.

Southwest Airlines CEO Gary Kelly boarding a plane at Houston Hobby Airport in June to visit employees.(Stephen M. Keller / Southwest Airlines)Southwest Airlines has room to expand its fleet by nearly 500 new airplanes after adding more than a dozen new destinations during the COVID-19 pandemic, the most aggressive growth in the company’s history while competitors were scaling back, CEO Gary Kelly told The Dallas Morning News Wednesday.

Southwest, which recently doubled down on its single aircraft fleet with an order of 100 new Boeing 737 Max 700 jets, projected the need for a fleet of nearly 1,200 planes before the COVID-19 pandemic, Kelly said. With flying down during the pandemic and idle airplanes needing to be put to use, the airline added 17 new destinations during the pandemic in places such as Houston Intercontinental, Miami and Eugene, Ore.

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“We’re going to have to acquire more airplanes to be able to restore the rest of our route network,” Kelly said. “And now that travel demand is coming back to life, we need to restore that capacity, and it will take us a while because we’ve diverted airplanes to these new markets.”
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The summer travel surge at airports may make you think it’s 2019 again ... just with masks

Millions of Americans are ready to cast away the precautions of a year spent avoiding airplanes and destinations and Airlines and travel analysts are anticipating a surge in demand that could make airports look like they did before the COVID-19 pandemic sucked the momentum out of the red hot travel industry. American Airlines said it will fly about 90% as many domestic seats this summer out of DFW as it did in 2019, a record year for airlines. They will also fly about 80% as many international seats as they did in 2019, buoyed by trips to Mexico and the Caribbean since most of Europe and Asia remains tough to access for American tourists.“The point being that we have hundreds of airplanes of growth still available to us, we think,” he said.

That would mean major growth for Southwest, which has nearly 60,000 employees and already carries more domestic passengers than any other airline.

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Southwest had 718 planes in its fleet to start 2021 and as many as 123 new planes coming from Boeing, all Boeing 737 Max jets. It is now up to about 750.

Getting to 1,200 planes would mean growing the airline’s fleet by more than 50% and surpassing even its biggest competitor in American Airlines, which has about 900 planes in its mainline fleet.

Southwest has orders for about 330 Boeing jets between now and 2026 and options for 130 more. But many of those orders will only replace older jets nearing retirement. Getting near 1,200 planes would require even more orders or extending the life of older planes.

The Dallas-based carrier has spent most of 2019 and early 2020 running on a shortage of airplanes with the grounding of the 737 Max by federal and international regulators in March 2019 following the discovery of a critical software flaw that contributed to crashes in Ethiopia and Indonesia.

Southwest is the largest operator of the 737 Max in the world and even though the company indicated it would consider a new airplane type, presumably another Boeing plane or an Airbus aircraft, it never seriously looked past the 737.

“We’re not thinking about another airplane at all,” Kelly said.

The new 737 Max 700, a smaller plane that will hold about 150 passengers with Southwest’s anticipated configuration, will help it grow in some of these smaller destinations that Southwest added over the last 15 months. Cities like Bozeman, Montana, and Palm Springs, Calif., may require some of those smaller planes and could help the airline schedule multiple point-to-point flights a day because there are fewer seats.

But while Southwest was adding new markets, Kelly acknowledged the airline will be constrained in getting flight traffic back up to pre-pandemic levels in cities such as San Antonio, Chicago and Houston.

That will likely stop Southwest from adding new destinations in the future at the rate the airline did in 2020 and early 2021.

“I don’t see us adding a lot of new service in ’22 to ’23, maybe even ’24 and ’25,” Kelly said. “It’s just hard to know because our first priority will be to get San Antonio back, to get Houston back, Chicago back and so on.”

Southwest is in the same situation as other airlines, readjusting schedules to prepare for an influx of summer leisure demand and maneuvering for a long-term period where business travel is slow. Just last week, Southwest told investors that traffic is coming back quickly, but capacity will still be down 24% in June compared to 2019.

“Business travel may not recover for a decade,” he said.
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Southwest Airlines recommits to Boeing with order for 100 new 737 Max 7 jets

Southwest Airlines will buy 100 new Boeing 737 Max 7 jets over the next decade, ending any speculation that the Dallas-based carrier will switch away from its all Boeing fleet.

WHACKMASTER

Is there still hope for some A220s on property? Who am I kidding

avi8er

Wait.... oh yeah 1221

BobbyLeeSwagger

Buy breeze!

RJSAviator76

Tis the contract season... everyone is due again. Can anyone already see the letter from RM telling us "left seat or LTD benefits, Delta rates or upgrades..."

e6bpilot

I don't think this article has anything to do with contract season. SWA will staff for the growth they want to achieve. They also have the advantage of stalling our contract for eternity until they get a number they want. I think most of the pilots at SWA are way too savvy to fall for any bribe or extortion scheme.
The sooner we move on to mediation (it will happen, it's a foregone conclusion), the sooner the clock gets started in using the RLA to OUR advantage. The longer we take to get to that step, the more it works to their advantage. I am just chilling and letting the union do their job.
In the meantime, it's nice to see the airline focused on growth. When you are talking about buying hundreds of planes, I think it is safe to say you have moved out of the "survival" phase, although I am sure they will play that hand for as long as possible.

ZapBrannigan

GK is really careful with how he uses words. Did he promise growth when we reached a certain ROIC? Or did he just say we couldn't grow until we reached that metric? Did he say we WOULD serve 50 new cities... or just that there were 50 new cities that we could profitably serve?

And now is he saying we will buy hundreds of airplanes, or simply to serve all of the markets at 2019 levels we would needs hundreds more airplanes.

There are subtle distinctions but important. There are no firm plans or promises in what he says. And nothing we do will force his hand. It either makes business sense to grow the airline, or it doesn't. I suspect this will weave it's way into CBA negotiations but I think CM and the negotiators are shrewd enough to see past it.

I hope it's all true of course, but after 25 years of doing this job with a lot of different colors on the tail I've learned one thing. Don't believe anything until it's sitting on the ramp and the bid is closed.


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at6d

There’s a lot that can happen in the next decade. I’m sure all the majors have their pipe dream growth visions.

Grumpyaviator

Meanwhile at UAL...

https://www.cnbc.com/2021/06/03/unit...upersonic.html



https://m.youtube.com/watch?v=GoSNLQ...ature=youtu.be

RJSAviator76

Except you know what’s coming....

“United 1, reduce speed to Mach 0.73 or less for spacing into EWR.”