Southwest’s Incoming CEO Says Hiring, Growth Will Be Big Early Challenges
Incoming Southwest Airlines CEO Robert Jordan was only planning to pick up his food when he went through the drive through at a Dallas-area Whataburger recently. But stapled to his food bag was also a job application — a symbol of the entry-level hiring challenges that face business across the U.S.
Southwest is in the middle of that fray. The Dallas-based carrier is receiving on average just 14 applications per open position compared to 42-43 per position prior to the Covid-19 crisis, Jordan said at the Skift Global Forum in New York on Thursday. And that is even the case after the airline raised its starting wage to $15 an hour, a level that Jordan said has become the “de facto” minimum wage across the U.S.
“The constraints have always been can we get aircraft, can we get facilities, [and] can we get gates,” he said. “I’ve never experienced a time when the constraint is ‘can we get employees?’”
Staffing issues are hitting Southwest where it hurts: operations. In August, the airline cut more than 5,000 flights from its schedule in September and October citing staffing-related operational challenges during the summer and the fallout from the Delta variant on travel demand. But even with those reductions, the Southwest Airlines Pilots Association may picket at major airports during the yearend holidays to show their dissatisfaction with the carrier.
“Stability in our operation depends on staff,” said Jordan at the forum.
Southwest plans to hire 5,000 additional workers by the end of the year, and another 8,000 in 2022. Open positions are for jobs across the carrier but primarily in frontline positions.
While staffing is a top concern for Jordan as he prepares to take the reins at Southwest from CEO Gary Kelly in February, it is just one of many that the incoming chief faces. For one, the airline industry continues to slowly emerge from the Covid-19 pandemic and the travel slowdown. Asked about the recovery, Jordan said that he sees 2022 as another “transition” year in the recovery. He is optimistic that business travelers will return — his predecessor has said this may take 5-10 years — but does not expect this to occur overnight.
“I’m an optimistic guy,” said Jordan. “I’m very optimistic that we’re going to get the travel back.”
U.S. domestic passenger numbers were at roughly 79 percent of 2019 levels during the week ending September 21, according to data from Airlines for America (A4A). That’s down from a peak in July when numbers were nearly back to where they were two years ago.
Looking forward, Southwest sees “normal” booking trends for the yearend holidays, said Jordan. U.S. airlines are broadly optimistic for a travel boost around Thanksgiving and Christmas after revising back their fall outlooks.
Jordan also faces the challenges of managing all of Southwest’s network growth during the crisis. The carrier added a record 18 new destinations — ranging from Chicago O’Hare to Miami and Steamboat Springs, Colo. — to its map in the last year-and-a-half, and greatly boosted its presence in Hawaii. It did this by reducing the number of flights — or depth of service — to many of its existing destinations when business travel evaporated.
Southwest plans to build back that depth in 2022 with the delivery of 114 new Boeing 737s. Those planes will replace the 92 aircraft used to launch all of the airline’s new markets and then some. Asked if Southwest’s growth will continue, Jordan said the airline “may open a few” new markets next year.
“I’m 80 percent excited and about 20 percent terrified,” Jordan said of his new job. And, for those wondering, he did not apply for that Whataburger job.Subscribe Now to Airline Weekly