Name: Southwest Airlines CEO: 'Business is Coming Back'
Uploaded: 2022-04-28
Duration: 12 min 53 s
Description: CEO Bob Jordan says 2022 will be profitable and 'very optimistic about our future.'

CEO Bob Jordan says 2022 will be profitable and "very optimistic about our future."

Southwest Airlines CEO: "Business is Coming Back"

Leadership

bob. Thank you so much for joining us to talk about Southwest Airlines. You know, it's now just three months since you took over as Ceo described to us, how's business, how are things going? I will tell, you know, the last two years have been an absolute roller coaster. So we, if we go all the way back to the beginning of the pandemic, We saw our business dropped 97% in three weeks. What we've seen, you know, beginning last summer into the fall and now is much more encouraging. So business is really coming back And if you think about right now are spring break kind of our march travel is actually above on the leisure side ahead of 2019 levels, which is just incredible. It's terrific to have the business and the leisure demand back. And uh, we're, we're on our way to restore ourselves to pre pandemic levels. It's just gonna take the amount of time to get back to normal and stable as we get staffed and we restore our network. But hey, this is a much better place to be. I'm very encouraged. Well, actually, on your first day on the job, you sent an email to all Southwest employees And you described the goals for 2022 and you said that your top priority is hiring more people. Actually, the number you said was 8000 people this year. And it's not just the pilots and the flight crew, but it's everyone in all aspects of your business. How close are you getting to that goal. I would label this year, 2022 as a year of getting back to basics again, back to trying to emerge emerge from the pandemic. So it is really basic stuff. It's, it's gets stabbed is restore our network, It's restore our operational reliability. It's getting back to that hospitality that Southwest Airlines is known and loved for and, and getting the mask off is gonna be very helpful. But if you look at something just like staffing in particular, which is key to getting all of our aircraft back in the air, We're making tremendous progress. We hired roughly 4000 people in the first quarter alone. The most we've ever hired. So what's your policy now for people flying on southwest? What's your policy on math? Well, the policy is exactly that if you are more comfortable flying wearing a mask again, whether that's your an employee or customer, you're, you're certainly allowed to do that. I think a lot of people heard when they heard the mandates going away, they heard, I can't, I don't have a choice to wear one. And when we, we've really taken a lot of time to try to explain to know what we're talking about here is choice If you're more comfortable with a mask, you wear a mask. Again, whether your employer or customer and that's really what we want. I think a lot of the division that you sometimes saw in the aircraft, you know, that there were high profile altercations, for example, they came where people where people that have very different opinions, uh, got into a lot of attention and now that you've got choice, I think that'll cure a lot of that. So what do you think this means for Southwest business? Do you think that more people will feel comfortable um, getting on an airplane or not? Well, our data and we, we measure every single day, we measure to understand how many of our customers generally are comfortable flying And then how many are comfortable flying with and without a mask. And the data has told us over a long period of time here that customers are increasingly comfortable flying. And that number is upwards of 90% now, which is terrific. And it's also telling us that customers that are comfortable flying without a mask has been rising significantly and it's a vast majority as well. So I I I think it just adds one more aspect to a reason to fly. I can't tell you how many folks wouldn't fly because they had to wear a mask. I've got to believe it's a small percentage. But taking every barrier that we can out of the process to bring back our travelers is terrific. And here's one more barrier. That's down a lot of people are getting concerned that cases of people getting a Macron is going up. Um, and so they're wondering is this the right time to take your masks off, what do you say? Is it safe? You know, we just like the CDC says, we've tried to follow the data here and there's a lot of data and there's a lot of opinion so far the data would show that while there is a modest rise in cases there is not yet a corresponding rise in hospitalizations. And what we've seen is that the connector to business travel and connected to leisure travel really is the rise in hospitalizations. That what's that? That is what makes people uncomfortable. And so far we don't see a rise in hospitalizations. So we're all for following the science and I think the science so far will tell you this is absolutely the right decision. What's been the reaction from southwest employees? How do they feel about the end of the math mandate? Yeah. Well I, as you would expect uh, this has been uh, highly divisive. It's been less divisive I think cause it's moved along here and the mask mandate has been in place. But you have a lot of opinions. I think the majority of opinions are in the camp of, I don't want to be forced to wear a mask all day. I mean it's just tough. I fly a lot. I visit our stations. I, I fly across the system. It's hard to wear a mask for 12 or 14 hours. It's very uncomfortable. So the vast majority of our employees I think are very happy that they now have a choice. So I'm really happy for them. Well we we are in a tight labor market and a very competitive one. I mean what's been your sales pitch to get people to come to work for you at Southwest Airlines we have a lot to offer but you still have to work to get the resumes and get the applicants. Ah But we've had to work on things like just basic wages. We we for most of our entry level jobs we raised wages from about 13 50 an hour which was contractual 2 15 to 17. And now in some of our airports and 20. So you've got to keep up with the market. It's a market but we offer great benefits. Great pay great place to work And I'm convinced and absolutely uh sure that we're going to fill all of our hiring positions. Well there's no question, money always helps those that help. But but what's the downside? If you don't fill all of those jobs that you need until we are properly staffed? We just can't fly all over aircraft. I mean to be really basic here, we've got to have the staff to fly our aircraft until we can fly all of our aircraft. We can't restore our network. I just get it back to where it was pre pandemic. And really what that means is there's just not as much depth. You might have had five flights a day in the city pair and now we might have to and so without that depth, it's just not as good as scheduled for our customers. And then when we get into a regular operations, it's it's not as easy to recover the airline, but we're going to get staffed and staffing is in what is really what's in the way of restoring the network and we're going to get there. Well, can you describe to us the status of travel demand right now? Uh you know, who's buying the tickets? And is it enough? Travel demand is really strong. If you look at March as an example our spring break travel and March travel. It is the leisure demand is well ahead of 2019, which is wonderful. Our business demand is coming back very quickly. Now it's off of a, of a much lower base. You know, it was reduced much further during the pandemic. But we're hitting our goals on the business travel front as well. There's plenty of demand well, and I know you're trying to fill up your planes. I understand the southwest has just announced a new uh ticket plan. It's the first one in 15 years. Uh from what I hear it's cheap and it has lots of perks. Tell us about it. And why is this important to offer this ticket? Now you bet I'm really happy to announce. Want to get away plus and the big deal about want to get away. Pluses, we didn't take anything away from, want to get away our base everyday uh low fares. What we did is we, we looked at what our customers wanted and needed and it really came down to a couple of things transfer ability, the ability to do same day standby and uh same day upgrades and that's what's gonna be in one of them want to get away plus. And so it's a terrific fair. The difference between want to get away and that is very modest and we have not raised our everyday low want to get away affairs and it's terrific for our customers and I'm really happy to get out there in the market. How much new revenue? How much new business do you think that this will bring to southwest it's material, but we have not been specific about the value of want to get away plus, but it's going to be a real contributor given everything that you've been telling us. What does this say about the financial outlook for southwest for 2022, will the airline be profitable? We were solidly profitable in March. So we know that and our, our plan and our goal is to be solidly profitable across every quarter of the rest of the year. I mean, one of our goals get back to basics is to be consistently profitable and if you look at our plans as of today? Uh, I will tell you, we can achieve that quarter to quarter. You sound very optimistic bob. I'm an optimistic person at heart. I think you have to be or a realistic optimist. The pandemic was hard on everybody, but the core of Southwest Airlines has not changed. We have wonderful people that love to serve others. We have a terrific network. Were highly efficient. All of those things were in place and uh and they've come out of the pandemic with those strengths still in place. So I'm very optimistic about our future. Well, you you talk about how Great Southwest Airlines is and you've been working for the airline for 34 years for most of your career. So you're very familiar with its winning formula. No frills, low fares, no baggage fees, no seating assignments. But you're the ceo, you're the boss now and you can move away from that tradition. Any thoughts about changing up the formula. You know, I have, this company is not broken. There are things that I want to work on. I think we have the opportunity to continue to increase our customer experience offerings for our customers, customers, uh desires and wants and needs change all the time. And we have a lot of opportunities to bring even better tools to our employees and our leaders to be able to manage that through that orchestra of chaos every day and an even better way. And we have we have a lot of opportunities to work on our employee experience, employees expect just like they do in their private lives to be able to work with the company off of apps and their phone and take friction out of the system and we have opportunity there. So my goal is to make this wonderful company and even better place. What do you think it takes to get your employees no matter what their opinions are about the airline uh lined up behind you and motivated and following your lead for all the things that you're planning for the airline. I think number one, you've got to demonstrate that you care, it's impossible. Words only go so far. So again, I feel like I need to be out there. I can't be everywhere, but I need to be out there, making sure I listen, understand what's happening, engaged with our employees and just be there for them. The second thing is you've got to understand what it is, you're being told, You can't do 1000 things, you have to focus on three or four or five key things that will impact their experience every day. Like getting staffed and at last you have to be responsive, whatever you say you're going to do, you have to live up to it. You have to do it Well, um when Gary kelly tapped you to the ceo, I'm sure he had a few tips for you. What leadership advice did he give you? He taught me all kinds of lessons. He's a true world class leader, but I would pull it down to a few things. Number one, put your people first, If you're ever not worrying about the people things, you should not be in leadership. It all comes down to the people on the team. Build a great leadership team and we have a wonderful leadership team here at Southwest Airlines. You can't do everything. So you need a leadership team that can take the hill and and can execute. And we've got a wonderful leadership team here at Southwest. Be clear, be concise. We can't have 40 goals. We can only have three or four or five. So be really clear with the organization about what's most important. And I think last, just thinking about coming out of the pandemic, um, you can't lose hope. You've got to be realistic, but you've got to be optimistic and the company and your employees are going to follow your lead. And if you're despondent, they're despondent. So believe it, believe in what you're doing, believe in the company, be realistic, but have hope and know that we are going to have an even better future