(Bloomberg) — Southwest Airlines Co. will continue to add new destinations to help boost revenue even as it seeks pay cuts from workers because of a collapse in travel demand.
Expanding into new markets “is really a mandate” as the carrier seeks new customers amid the coronavirus pandemic, Chief Executive Officer Gary Kelly said Thursday. He announced new seasonal service to Montrose, Colorado, which is near ski resorts in Telluride, and set Nov. 15 as the starting date for Southwest’s previously disclosed debut in Miami and Palm Springs, California.
The additions enable Southwest to tap more of the remaining demand for flights to beach and mountain locations as domestic passenger counts languish at about a third of 2019 levels. Southwest is incurring “minimal additional costs” in expanding to the new cities and there are other growth pockets to be tapped with the company’s fleet of Boeing Co. 737 jets, he said.
“It’s exciting to take the fight to the competition and put idle aircraft and overstaffed employees to work,” Kelly said in a video message to employees. “Fortunately, our route map still has dozens of airports for growth with 737s. We’ll pursue these opportunities aggressively but not recklessly, and in every case they must meet our cash-flow threshold and contribute to our recovery.”
Video: Trump urges Congress to provide $25 billion bailout for U.S. airlines (Reuters)
Southwest is trying to cut employee pay in a last-ditch effort to avoid the first involuntary furloughs in the company’s 49-year history. About 17,000 employees already have left the Dallas-based company temporarily or permanently through voluntary programs.
The airline has said it will drop the effort to reduce compensation if Congress and the Trump administration agree on extending federal payroll support another six months.
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