A passenger checks in her luggage at the Southwest Airlines terminal at LAX.
Mel Melcon | Los Angeles Times | Getty Images
Southwest Airlines customers suffered hundreds of cancellations, delays and other disruptions this summer as the airline faced snowball issues like bad weather and staff shortages.
The next CEO, Bob Jordan, vowed not to repeat that. The airline is roughly halfway through its target of hiring 5,000 people this year and has already cut its schedule for the rest of the year to avoid further service downtime. The airline, and others like Spirit and American, set an ambitious schedule last summer to try to recapture the revenue lost during the pandemic, but a staff shortage exacerbated operational problems.
“The next question is the schedule for March. We plan to adhere to this, but if we can’t adjust we will go back and change the schedule, ”Jordan said in an interview on Thursday. “What we will not do is we will not repeat last summer.”
Jordan, who will take the reins from Gary Kelly in February and is a 33-year-old Southwest employee, told the Skift Global Forum in New York on Thursday that the airline also plans to hire 8,000 employees next year. The Dallas-based airline has approximately 56,000 employees.
Hiring was a challenge.
“We pull out every stop,” said Jordan. The airline increased the starting salary to $ 15 an hour and offers loyalty rewards, referral bonuses, and additional wages for certain higher-cost-of-living markets like Denver, he said.
Jordan said he was confident it could achieve its goal of adding 5,000 workers this fall, but the competition has been brutal. Employers, from retailers to airlines to restaurants, struggled to fill positions and turned to bonuses and higher wages to attract workers.
Southwest lowered its third-quarter revenue forecast in August, citing weaker bookings amid a spike in delta variant cases of Covid-19.
“Vacation bookings are holding up really well,” said Jordan. “It feels like we’re on the back of this delta wave.”
Southwest and other airlines have been trying to make sure their own employees are vaccinated against Covid-19. United Airlines has the strictest policy: an absolute mandate for its 67,000 US employees, which, with few exceptions, requires vaccination or dismissal. Delta Air Lines plans in November to add a $ 200 per month surcharge to company health insurance for unvaccinated employees.
Southwest is currently offering incentives such as a two-day salary for employees who upload a vaccination certificate. Jordan told CNBC that he would prefer to use incentives and not give a vaccination mandate.
“I know the vaccines issue and mandates are personal, it’s emotional, but at the end of the day we need to vaccinate as many people as possible as a country and as a company,” he said. “I would much rather get there through incentives and encouragement and data than through mandate. I would love if our people had a choice.”
However, a government vaccination mandate for large employers as well as government contractors could change that. Southwest fits into both categories as it operates charter flights for government and other services.
“There’s a lot to learn what the rules are,” he said.
Jordan said it wasn’t yet clear what percentage of employees were vaccinated, but the new incentives would provide more data. He estimated the company’s fully vaccinated employee rate reflects the national average, which is just over 64% of the US population over 12 years old.