It has been a rough few years for the airline industry
First, the covid pandemic essentially drove demand to zero, That was devastating in the short term, but it also had a much longer-range effect.
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As covid raged and operations diminished, airlines found ways to shed staff to save money. Southwest Airlines (LUV) -) did not have any layoffs, but thousands of its pilots took early retirement.
The same thing happened at pretty much every airline. JetBlue, Delta, American, United Airlines, and really the entire industry lost pilots that they now have no easy way to replace. That's a significant problem as covid has stopped being an active concern and air travel has returned more or less to prepandemic levels.
The lack of pilots, of course, is not the only problem limiting growth at the airlines. Boeing has fallen behind on its deliveries and the Federal Aviation Administration faces an acute shortage of air-traffic controllers.
These problems have caused many airlines to cut routes and limit service in certain markets. Many of the above-mentioned airlines have cut as much as 10% of their flights from New York and Washington because the FAA allowed them to do so due to the shortage of air-traffic controllers.
Southwest, however, despite dealing with its own pilot and aircraft delivery issues, has continued to expand and has added a major new hub.
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Southwest expanding in Nashville
Southwest has decided to build its 12th crew base at Nashville International Airport. The airline will open its new crew base with 150 to 250 pilots starting in early 2024 and will grow that to 500 to 600 pilots and 500 to 700 flight attendants going forward.
"Hundreds of Southwest employees who work in the air and on the ground already consider their hometown to be in middle Tennessee, with our presence in Nashville remaining a key factor to our success, future growth, and the reliability of our network," Southwest Chief Operating Officer Andrew Watterson said.
A crew base is a hub where crew members live and from where they can start their workdays. It's common in the airline industry for pilots and flight attendants to live in places other than their base cities. That adds a layer of potential problems as those staff members need to fly to get to their assignments.
Southwest has been flying out of Nashville since 1986 and it's now the largest carrier at the airport. Adding a crew base in the city is part of the airline's broad plan to avoid delays and eliminate systemwide failures like the holiday meltdown that left tens of thousands of passengers stranded last December.
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Southwest has fixed its pilot shortage (for now)
Southwest Air has been dealing with a pilot shortage and increased competition when it comes to hiring pilots. Watterson addressed the matter during the company's second-quarter-earnings call.
"It's definitely a hot pilot market. And, I guess, hot employee market as well. You have to work extra to hire people and to keep people. And so, it's a record year from our pilot hiring," he said.
That does not tell the full story as keeping pilots has been a challenge, but the problems have not hurt Southwest's plans so far.
"It's also a record year for pilot attrition, but it's a modest number that is not sufficient to actually change our plan. So, our amount of flying we have this year and the next is not at all affected by this, kind of, a little bit uptick in attrition this year," he added.
Southwest is currently negotiating a new contract with its pilots union while other airlines have reached new deals.
"We do see pilots as a kind of a job hop around the industry, trying to maximize their personal gain, what airline appeals them the best. And I don't begrudge that to them because it's once you start with the main line, it becomes ... a lifelong commitment" because of the seniority system, he said.
Watterson also says those issues might be settling down.
"We do see some people who come and leave right away, but it's -- I think it kind of spiked here in the second quarter and now it's kind of even starting to tail off a little bit," the COO added.
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