Dallas-based Southwest and other airlines are cutting thousands of spring flights from schedules due to major disruptions from high fuel prices, staffing issues and other current supply chain restrictions.
According to flight schedule service Cirium, Southwest Airlines recently cut 14,500 flights from March to May, and on Tuesday the company cited “persistent issues with existing staff.”
Southwest, which made the announcement in a regulatory filing Tuesday, said it now expects its 2022 flight schedule to be about 4% lower than 2019, even after stronger-than-expected bookings this year. In the second quarter alone, Southwest Airlines’ capacity will be about 7% lower than in 2019, even as travelers are keen to fly.
The carrier, however, said its earnings would be slightly better than previous estimates.
“The company’s current spring break leisure travel revenue trends are strong and above 2019 levels,” Southwest said.
The cuts are coming even as airlines like Chicago’s United see “travel demand exceeded the company’s previous expectations,” but the effects of a quick economic recovery are putting pressure on inflation and the workforce that were hard to gauge a few months ago when charts were up. made.
Southwest also said business travel continues to suffer, especially in January and February as the country was swept by a micron variant of COVID-19.
Competing airlines are cutting schedules for other reasons that prevent carriers from returning to pre-pandemic flight levels.
On Tuesday, United said it was cutting its capacity until the end of 2022 “in response to several macroeconomic factors, including rising fuel prices, as well as expected delays in the delivery of aircraft.” United has cut its May schedule by about 2,500 flights and more than 20,000 flights each month from June to August. Recently, Seattle-based Alaska Airlines and Las Vegas-based Allegiant said they were cutting their flight schedules by about 5% due to high fuel prices, which rose even higher after Russia’s invasion of Ukraine and subsequent sanctions.
After adding more than 5,000 employees last year, Southwest Airlines said in January that it plans to add another 8,000 new employees this year. The airline recently increased its starting wage from $15 to $17 an hour in January, which is expected to cost the company $20-25 million this year.
“While we have a great plan for 2022, it all comes down to hiring,” Southwest Airlines CEO Bob Jordan said in January.
Southwest has not been hit as hard by higher fuel prices as other airlines because it is aggressively hedging high fuel prices. About 65% of the company’s fuel is purchased under hedged contracts, according to the company’s presentation to investors.
The combination of high demand and flight restrictions could mean that airfare prices continue to rise. Southwest raised system-wide prices on Feb. 1, Chief Financial Officer Tammy Romo said Tuesday during an investor conference.
“The pricing environment has been healthy as demand has been bouncing back from the omicron option,” she said.
Higher prices combined with fewer flights could mean that this spring/summer travel season will be more difficult as many return to travel for the first time since the pandemic began in early 2020. Prices were already rising rapidly before the recent restrictions as tariffs return to pandemic-levels.
Outgoing American Airlines CEO Doug Parker told the same investor conference Tuesday that the airline recorded its best three days of ticket sales of all time last week.
Flight cuts could hit North Texas airports hard, where Southwest Airlines is cutting about 9% of all flights in April and May. This includes all flights to Louisville during the month and a significant reduction in flights to cities such as Burbank, California; Minneapolis, Minnesota; and Harlingen, Texas.
Southwest said a hit from omicron in January and February would mean the company will not be profitable in the first quarter, even as it “continues to expect solid profitability in March, the month of spring break.”
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