Southwest CEO 'Confident' on Turnaround Plan, Sees 'Very Strong' Holiday Demand

Southwest Airlines Co. (NYSE: LUV) CEO Bob Jordan has expressed confidence in the airline's turnaround plan, citing robust holiday demand and a solid third-quarter performance. Despite dealing with an activist investor, Southwest reported strong holiday bookings and a better-than-expected third quarter, with net income of $67 million and revenues of $6.9 billion.


The airline anticipates pressure on fourth-quarter costs due to cancellations from Hurricane Milton and reduced capacity. However, Southwest plans to boost profitability through strategic changes, expecting an additional $4 billion in earnings by 2027. Some of the key changes include premium and assigned seating, red-eye flights, airline partnerships, and cutting capacity in underperforming areas.


Southwest executives have been working with regulators and vendors to certify new premium cabin configurations, with retrofitting aircraft expected to begin early next year. The carrier plans to retrofit 50 to 100 aircraft a month with the premium cabins. Despite delivery delays with Boeing 737 Max 7, Southwest is ending the year with 2,000 fewer employees and aims to rely more on its existing fleet.


The airline is also focused on minimizing disruptions from Hurricane Milton and addressing potential customer dissatisfaction. Jordan has stated that Southwest is laser-focused on delivering the robust set of tactical and strategic initiatives included in its plan and returning to the strong financial performance it expects.

In conclusion, Southwest Airlines' turnaround plan is well underway, with a confident CEO and strong holiday demand. The airline's strategic initiatives, including premium seating and partnerships, are expected to contribute to its profitability by 2027. Despite challenges such as Hurricane Milton and delivery delays, Southwest is committed to executing its plan and maintaining its competitive edge in the airline industry.