Interest in Flights to Hawaii Is 'Darn Strong,' Says Southwest Airlines CEO

The CEO of Southwest Airlines has said demand for flights to Hawaii remains strong as the company faces a potentially difficult few months amid the ongoing COVID-19 pandemic.

CEO Gary Kelly told investors on a call on Thursday that "Hawaii demand is actually pretty darn strong" but he also addressed the fact that Southwest Airlines made its first annual loss since 1972.

"It was a big one and with non-GAAP losses coming in at $3.5 billion," he said. GAAP is an acronym for Generally Accepted Accounting Principles that public companies in the U.S. must follow.

Kelly told investors that the airline is "very well prepared" for the difficulties it faces and had been encouraged by recent executive orders by the Biden administration.

"The precleared program that they've put in place now that several carriers are leveraging, it really does make the experience pretty straightforward," he said.

"And the demand for Hawaii is actually very, very solid. So we think there's a tremendous amount of opportunity there."

Kelly said that the company was seeing positive things from Arizona, Colorado, Florida and Texas, while Hawaii and California "began the fourth quarter with encouraging momentum."

Kelly said that "quarantine and stay-at-home orders will reverse some of that." He also said the airline would do its best to control costs such as inventory, operations and pricing.

"Those things that we control, we will manage and control well," he said.

Southwest Airlines is the fourth largest carrier in the U.S. and recorded losses of $3.5 billion for 2020. The company had previously been consistently profitable for 47 years.

The company's revenue fell 60 percent in 2020 due to the almost complete shutdown of air travel due to the global pandemic. Southwest Airlines' revenue was $9 billion last year.

"Even Southwest is not immune to COVID-19," Kelly said of the losses. "Yes, these are bad times. Yes, we had our first loss since our startup year. But we have much to be grateful for, and we have every reason to be hopeful that this, too, shall pass."

The U.S. Centers for Disease Control and Prevention (CDC) issued a sweeping mask mandate for public and commercial travel on Friday that will take effect at 11.59pm EST on Monday.

The new order will require air passengers to wear face masks and may make it easier for flight attendants to enforce mask wearing - something that has been a concern for airlines.

Southwest Airlines' troubles are not isolated. The biggest six U.S. carriers collectively lost $30.4 billion in 2020, according to CNN. Air travel is unlikely to return to pre-pandemic levels for some time.

Passengers Check in for Southwest Airlines Flights
Passengers check in for Southwest Airlines flights at Midway International Airport on January 28, in Chicago. Southwest Airlines reported its first annual loss since 1972 on Thursday. Scott Olson/Getty Images