Today, Southwest Airlines has released its third-quarter results. It comes as little surprise to anyone at this stage that the airline reported a staggering loss of $1.2 billion. However, what may come as more of a surprise was news that from December 1st, Southwest will be filling all available seats, effectively preventing social distancing on flights.
Southwest’s third-quarter results came out today with very few surprises. Considering the low demand and ongoing travel restrictions, the airline’s net loss and lower operating revenues will be similar to many other carriers.
Perhaps more surprisingly, the airline confirmed that it would be selling all seats on flights from December. Previously the airline had only confirmed social distancing until the end of October. Southwest doesn’t offer reserved seating, so it simply capped the number of tickets sold per flight.
In a statement, the airline said,
“Today, aligned with science-based findings from trusted medical and aviation organizations, we will resume selling all available seats for travel beginning December 1, 2020. We are pairing this change with enhanced flexibility for Customers on fuller flights to rebook to another flight if desired.”
Southwest has said the change comes after consultations with Southwestern Medical Center, Harvard University, the IATA, and Stanford University School of Medicine. Research conducted by those institutions suggests that the chance of getting or passing COVID-19 on a flight is less than 1%, so long as air filters and masks are used.
Mixed reactions
Southwest has said it is still committed to keeping passengers and employees safe while traveling. Any passengers who still wish to social distancing can change their booking to a less busy flight.
Besides increased booking flexibility, Southwest will continue to require all passengers and employees to wear a mask. In line with scientists’ recommendations, they are also relying on high-quality HEPA air filters to clean cabin air every three minutes.
However, the airline has received some very mixed reactions to the news. Southwest took to its Twitter account to provide customers with more detail and to show the science behind the safety. Research from Harvard, the IATA, and the Department of Defense all show that the HEPA filtration system and masks are enough to prevent the disease from spreading.
After November 30, we will unblock the middle seat on our flights. This decision was not made lightly, and we’d like to share how we arrived at it. (1/8)
— Southwest Airlines (@SouthwestAir) October 22, 2020
However, many customers have since pointed out the regular instances of people removing masks to eat and drink, or just wearing masks incorrectly. Several people also have reservations regarding boarding and disembarkation procedures as well as the touching of cabin bags. Not to mention concerns about who gets to use the armrest.
Q3 results
Aside from the change in seating policy, Southwest’s results were not out of line with expectations. Operating revenues were down to $1.8 million, a 68% decrease compared to last year. Southwest also said that if talks with unions fall through, layoffs may occur in early 2021. However, the airline added a plea to the US government to extend its payroll support program to avoid further furloughs.
Despite the rather negative numbers, Chairman and CEO Gary Kelly said, “We are encouraged by modest improvements in leisure passenger traffic trends since the slowdown in demand experienced in July.” The TSA is now reporting small increases in the number of people flying.
The airline’s liquidity stands at $15.6 billion, which is “well in excess of debt outstanding.” Southwest recently shocked many by refusing the government’s $2.8 billion offer as part of the CARES act citing its liquidity and ability to fundraise as reasons why it didn’t need the loan. Increased traffic numbers and more seats available suggest that the airline is looking towards the road to recovery.
Do you think it’s too soon to be looking at recovery? Is the airline right to ax social distancing? Let us know your thoughts in the comments.
