Biggest Issue for Travel Recovery Is Still Pilots

Bob Jordan took over as CEO, the sixth in the airline’s history, on Feb. 1, about seven months after former CEO Gary C. Kelly announced his retirement. Prior to that, he had spent more than 30 years with Southwest in 15 different roles ranging from computer programmer, a role that he started, to director of travel agency accounting.

Speaking on Thursday at the ASTA Global Convention in San Francisco, Jordan said “it’s a joy a privilege to be able to be in a role for a company that you love,” despite him being a “reluctant CEO.”

“A lot of people aspire to be in this job their whole career…I have always enjoyed work…but I wouldn’t say I have ever been real career-focused,” he said. “When the company you love asked you to do a job, you step up and do that.”

Southwest is still dealing with post-pandemic challenges, but things are improving.

According to Jordan, Southwest is now staffed at the same level it was prior to the pandemic after months of heavy hiring. Right now, the carrier is hiring at a rate of 1,500 people per month, including 13,200 over the past 12 months and 11,000 year-to-date. For comparison, 7,000 in one year was a pre-pandemic high.

The issue for Southwest, and for so many of its competitors in the aviation industry, is the difficulty finding and training pilots, a position that is obviously crucial to its operations.

According to Helane Becker, a long-time airline analyst who spoke to Yahoo at the end of 2021, the industry may need 35,000 to 40,000 new pilots over the next decade in order to offset retirements and keep pace with travel demands. The industry is now tasked with finding and training those pilots, a group that is going to be absolutely crucial not only for the industry to thrive, but to continue to expand.

“We are not there with our pilots,” he said. “The limiter is capacity—we have limited capacity to train our pilots…that is the issue right now.”

More Engagement with the Travel Trade
Jordan was the only airline CEO to appear onstage at the Global Convention this week, which is a long way for an airline like Southwest to come. Southwest had historically taken different routes to success when compared with other carriers, including not reporting its bookings through ARC.

“We had a longstanding thought…a longstanding way that we weren’t going to participate in most of the standard ways to do things generally,” he said.

Southwest’s last decade or so of growth, combined with a rapidly changing travel landscape, has made it rethink things.

“At a certain point you get bigger…you have got to have a willingness to challenge our assumptions,” he said. Part of that was a lean into business travel with Southwest Business, a new section of the airline that was unveiled in 2019.

Corporate has been lagging leisure in the post-pandemic recovery not just for Southwest, but for the entire airline industry and the larger travel industry as a whole. For Southwest, the leisure business for summer 2022 is already 20% ahead of the same period in 2019, but that doesn’t mean that corporate travel is dead.

“Whether it is this topic or not, you learn that when someone says ‘it’s over forever, it’s changed forever,’ that’s just about the time it changes back,” Jordan said. “The business-business is trailing [leisure] but it has still recovered. Will we ever get back to 100%? That’s hard to predict.”

But, more relevant for advisors in attendance at ASTA Global Convention, it also includes a growing outreach to the travel trade, a portion of its business that is now just under 50% of its total sales.

“You can’t ignore that as a place for revenue,” he said. “We have the best network, the best frequencies, we serve the most cities, we have terrific hospitality and on-time performance, that is what business customers want so we have to be in the right place,” which is the travel trade, he said.

“I think a brighter future is in front of all of us. People want to travel – we are going to see a continued recovery here.