Southwest CEO Predicts Radical Restructuring for Airline Industry
The airline industry is continuing to suffer due to the coronavirus pandemic. Travel demand is down by more than 90% and even a recent uptick hasn’t done much for revenue. Recent data shows a three time increase from the lowest point, but we are still a long way from normal travel.
Southwest CEO Gary Kelly said Thursday in an interview that he will have to “radically restructure” the airline if travel demand does not improve dramatically by the fall. He said that the $3.29 billion in federal payroll loans and grants to Southwest, will just avoid layoffs until Sept. 30, as per Fox Business.
Airlines are flying almost empty planes in many cases and Kelly believes that if air traffic doesn’t increase soon, airlines will begin to run out of money. “We would have to radically restructure not just Southwest Airlines but the whole industry,” he said.
Airlines for America says that even though about 50% of U.S. airlines’ fleet is active, there is an average of “just 17 passengers per domestic flight and 29 passengers per international flight. Airlines are collectively burning more than $10 billion in cash a month.”
On a more positive note, Kelly said that the airline will begin offering international travel again in June as restrictions ease around the world. May has already been much better than March and April, but he expects June will be even more positive, especially for business to Mexico and the Caribbean.