Southwest, American cut thousands of spring flights

Airlines including Dallas-based Southwest and Fort Worth-based American are cutting tens of thousands of spring flights from schedules because of serious headwinds from high fuel prices, staffing challenges and other ongoing supply chain constraints. 

Southwest Airlines has recently cut 65,000 flights from its March through May schedule, according to flight schedule service Cirium, and the company on Tuesday cited “continuing challenges with available staffing.” American Airlines said Tuesday that it had cut flying for the remainder of the first quarter as well. But schedules show American has cut well into the second quarter too. Cirium’s data shows that American has cut about 71,000 flights between March and May during the last month.

Southwest, which made the announcement in a regulatory filing Tuesday, said that it now expects its flying schedule to be about 4% lower for 2022 than it was in 2019, even after stronger than anticipated bookings so far this year. For the second quarter alone, Southwest Airlines’ capacity will be about 7% lower than it was in 2019, even though travelers are eager to fly. Southwest, however, did say that revenue would be slightly better than previous estimates.

“The company’s current leisure revenue trends for spring break travel are strong and above 2019 levels,” Southwest said.

The cuts come even as airlines such as Chicago-based United see that “demand for travel has exceeded the Company’s previous expectations” but the repercussions of the economy’s quick bounceback puts pressure on inflation and labor that were hard to gauge a few months ago when schedules were made.

Southwest also said that business demand continues to suffer, particularly in January and February with the omicron variant of COVID-19 sweeping the country.

Competing airlines are cutting schedules for other reasons that are making it difficult for carriers to return to pre-pandemic levels of flying.

On Tuesday, United said it was cutting its schedule “in response to several macroeconomic factors including rising fuel prices as well as expected aircraft delivery delays.” Recently, Seattle-based Alaska Airlines and Las Vegas-based Allegiant said they were cutting flight schedules by about 5% with high fuel prices that have surged even higher after Russia’s invasion of Ukraine and subsequent sanctions.

After adding more than 5,000 workers last year, Southwest Airlines said in January that it plans to add another 8,000 new employees this year. Southwest recently increased its starting wage from $15 to $17 an hour in January, a bump that is expected to cost the company $20 million to $25 million this year.

“While we’ve got a great plan for 2022, it all comes down to hiring,” Southwest Airlines CEO Bob Jordan said in January.

Southwest hasn’t been hit as hard by higher fuel prices as other airlines because it aggressively hedges against high fuel prices. About 65% of the company’s fuel is bought with hedged contracts, the company said in an investor presentation.

A combination of high demand and constraints on flying could mean that prices continue to rise for airfares. Southwest hiked prices systemwide on Feb. 1, Chief Financial Officer Tammy Romo said Tuesday during an investor conference.

“The pricing environment has been healthy as demand has been returning following the omicron variant,” she said.

Higher prices combined with fewer flights could mean a tougher go for travelers this spring and summer travel season as many get back to traveling for the first time since the pandemic began in early 2020. Prices had already been rising quickly before the recent constraints as fares return to pre-pandemic levels.

American Airlines outgoing CEO Doug Parker said Tuesday at the same investor conference that the carrier had recently recorded three of its best ticket-selling days of all-time.

Southwest had previously planned about 345,000 flights for the March through May period but has cut that to less than 280,000, according to flight schedule service Cirium. American had 509,000 flights on its schedules but now has about 439,000.

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