Southwest Airlines has become the world’s largest air carrier, a title no one wants right now as airlines scramble to cancel flights and remove capacity with travel demand near zero.
Dallas-based Southwest had about 2.8 million scheduled seats on flights last week, 25% fewer than it did in January, according to airline tracking company OAG. But it was still more than American’s 2 million seats and nearly three times as much as Delta and United.
Both Delta and United are operating under 1 million seats a week with plans to cut even further in the coming weeks.
But it doesn’t come close to matching the severe drop the airline industry is seeing. Daily passenger traffic through airports is less than 5% what it was a year ago, according to the Transportation Security Administration. Dallas Love Field, where Southwest is based, is only seeing about 1,500 passengers a day.
“The capacity cut, while substantial, is not nearly large enough to meet demand trends,” said airline analyst Helane Becker with investment firm Cowen. “Southwest’s focus is on maintaining scheduling optionality for their customers despite there only being a few left.”
As recently as February, Southwest was the fourth-largest airline in the world behind American, United and Delta, according to OAG.
Southwest has been the slowest to react among the country’s major airlines as the pandemic has obliterated the need for most of the country’s airplanes. Southwest has parked at least 50 airplanes since the virus outbreak began. It also has been working to cut capacity by as much as 60% for the end of April and May.
Delta has announced plans to reduce capacity by 80% domestically and United is cutting overall capacity by 90%.
But cutting capacity isn’t simple for a massive airline such as Southwest, said aviation industry consultant Michael Boyd with Boyd Group International.
“The systems are designed for the number of passengers they were carrying three months ago before this all began,” Boyd said. “It’s not as easy as taking out a flight here and taking out a flight there.”
Southwest and other airlines are still aggressively consolidating flights on a daily basis. When a plane only has a handful of scheduled customers, airlines have been canceling that flight a few hours in advance and moving travelers to later trips.
Southwest has some advantages that other airlines don’t. It flies entirely in North America and mostly within the United States.
While American, Delta and United were announcing cuts in February, Southwest was still seeing strong demand for domestic travel. Southwest has long flown more domestic passengers than any other airline, which helped it in the early weeks of the COVID-19 crisis while flying in the U.S. was still strong.
Airlines also have challenges that come from participation in the government’s $50 billion airline aid program. Carriers are required to maintain air service to every market it currently serves, even if there is little demand.
But airlines such as Southwest also don’t want to cut so deeply that they won’t be able to respond when travel recovers, Boyd said. Southwest’s aggressive strategy during the Great Recession took market share from rivals.
“At some point, they are going to need to come back,” Boyd said. “And that isn’t so easy when you are operating at 10%.”
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