Southwest executives are pushing back against a rising chorus of analysts who say the company’s days as the airline industry’s disruptive force are over, reined in by higher wages and tougher operational challenges. The carrier known for its no-frills aesthetic and competitive prices is under pressure because its model is being put to the test, 50 years after its first commercial flight. Southwest increased starting pay to $15 an hour in August, and may have to go higher in some parts of the country to meet goals to hire thousands of workers, CEO Gary Kelly and his executive team said in an interview Friday. They also signaled their more cautious approach to rebuilding flight capacity -- adopted after a more aggressive plan backfired this year -- is likely to last well into 2022. Those forces have weighed on Southwest’s stock, the worst performing of major US airlines this year. And some analysts are skeptical that the company can regain the profitability and efficiency that once made it the industry darling. Goldman Sachs, UBS and Jefferies downgraded the shares after Southwest’s investor day this week, with Jefferies analyst Sheila Kahyaoglu calling it “no longer the low-cost carrier” in a research note. The analyst “is wrong -- absolutely dead wrong,” Kelly said. “They are missing the point that we are perfectly positioned for the environment.” Kelly, who will become executive chairman on Feb. 1, and Bob Jordan, who will take over as CEO, outlined a plan to fill 5,000 jobs this year and 8,000 in 2022. That would help replenish a workforce depleted by 4,500 voluntary departures during the pandemic. This year’s hot job market has pitted Dallas-based Southwest against Amazon.com, UPS and numerous other employers all vying for the same pool of entry-level workers.<br/>
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Southwest is frustrated by the slow pace of federal certification of Boeing’s smallest 737 Max jet, an issue that could delay the carrier’s commercial debut of the aircraft late into next year. The concern stems from changes by the US FAA and lawmakers giving regulators a larger role in the certification, drawing out that process, Southwest executives said Friday. Previously, Boeing had been allowed to oversee more safety decisions. “Frustration is the right word,” CEO Gary Kelly said of the delays. “It’s a different regulatory environment. A lot of duties that used to be delegated are vested with the FAA, and they are just getting used to that.” The FAA doesn’t discuss details of ongoing projects, but it signs off on certification once it’s satisfied standards have been met, the agency said in an emailed statement. Boeing didn’t immediately have a response. The Max 7, the smallest version of Boeing’s single-aisle workhorse, is a centerpiece of Southwest’s plans to revamp its fleet with newer, more fuel-efficient aircraft. The carrier is the top customer for Max jets, with 660 on order, including more than 230 Max 7 aircraft. The planes are more fuel efficient than the 737-700s they will replace, and have more seats. <br/>
Brazilian airline Gol Linhas Aereas Inteligentes SA said on Friday it expects its net revenue to come in above pre-pandemic levels at about 14b reais ($2.51b) in 2022, an announcement that sent its shares higher. The forecast compares with 13.9b reais of net revenue in 2019 before the COVID-19 pandemic struck, Gol said in a securities filing, while noting that revenue should increase by about 100% from the current year. Brazil’s largest airline also said that diluted earnings per share based on US-traded American depositary shares (ADS) are expected to reach about $0.10 in 2022, compared with $0.96 in 2019. Gol also expects 2022 capital expenditure of 700m reais, against 639m reais in 2019, while its net debt to EBITDA ratio was estimated at about six to one, up from four to one in 2019. The airline said its preliminary forecasts reflect passenger revenue and frequent-flyer revenue expectations for the next year. They also take into account free cash flow, financial expenditure, crude oil prices and forex exchange rates, it added.<br/>
Aer Lingus CE Lynne Embleton warned Minister for Transport Eamon Ryan about the “lack of understanding” within his department of the crisis faced by airlines last July, reports the Sunday Times. The newspaper says that documents released under the Freedom of Information Act show Embleton emailed Ryan raising the concerns ahead of a meeting between Aer Lingus executives and Government on July 30th. Ryan, Minister of State Hildegarde Naughton and Taoiseach Micheál Martin met Embleton and Aer Lingus corporate affairs chief, Donal Moriarty. The carrier had recently announced plans to close its Shannon Airport crew base after reporting losses of E103m for the first three months of the year. Embleton told the Ministers that the Government’s stance on support for air travel would slow the rate at which flights would be restored, resulting in more job losses as restructuring would be more severe. The newspaper notes that Moriarty expressed surprise in an email on July 16th at Ryan’s suggestion that EU state aid rules made helping aviation difficult. The Aer Lingus executive pointed out that other European countries were supporting their airlines, leaving the Irish carrier at a significant disadvantage.<br/>
Emirates airline will suspend all flights to Nigeria from next week after the West African nation imposed new restrictions on its flights, the carrier said Friday. The Nigerian Civil Aviation Authority announced earlier on Friday that it was restricting Emirates to just one weekly flight from 21 that had been initially approved. The authority said this was in retaliation for the United Arab Emirates declining an application by local carrier Air Peace to fly to Sharjah International Airport three times a week. UAE gave the airline one weekly slot, citing the lack of available arrival slots at the airport. "With the recently imposed directive limiting Emirates to operate one flight per week to Nigeria via Abuja, Emirates will be suspending its flights between Nigeria and Dubai from 13 December 2021, until the UAE and Nigerian authorities work on a solution to the ongoing issue," Emirates said. <br/>
A Philippine Airlines plane carrying 33 people veered off the runway after landing in rainy weather at a central airport on Friday, causing no injuries but delaying 34 incoming and outgoing flights, officials said. The De Havilland Dash 8 turboprop aircraft, which flew to central Cebu province from nearby Caticlan town in Aklan province, was towed away from the runway three hours later, allowing the reopening of Mactan-Cebu international airport, the Civil Aviation Authority of the Philippines said. The 29 passengers and four crew deplaned safely, the Philippine flag-carrier said. An investigation was underway. In a separate incident Friday, a Cessna 206 plane with two pilots and 25 boxes of live fish crash-landed on the shore of a village in the resort town of El Nido in western Palawan province due to engine trouble, civil aviation officials said. Philippine coast guard personnel rescued the two pilots from the floating aircraft near the beach, where the private plane landed after taking off from San Vicente town in Palawan on a flight to Sangley airport in Cavite province south of Manila.<br/>