Southwest Airlines says long-anticipated Hawaii service could slip to the second quarter, unless the US government re-opens within a week which could allow for a first quarter launch.
The Dallas-based carrier is awaiting US Federal Aviation Administration (FAA) employees to return to work before the airline can carry out tabletop exercises and validation flights to attain extended twin-engine operations (ETOPS) certification for the Hawaii service.
"We have a reasonable chance of starting service in the first quarter if the shutdown ends within a week," says Southwest chief operating officer Mike Van de Ven on an earnings call today. If that fails to happen, Hawaii flights will not begin until the second quarter, he adds.
"Until the government shutdown ends, we are at a total standstill," says Van de Ven.
The airline had initially planned to begin sales for Hawaii service by end-2018.
Southwest received its first approval from the FAA for the Hawaii flights in December 2018, but cannot complete the ETOPS certification process with FAA employees furloughed. "The FAA has approved our programme, it's ready to go," says Southwest chief executive Gary Kelly. "We only have to demonstrate that we can execute that programme. It's just a shame we are where we are because of the shutdown."
Kelly estimates it will take about six to eight weeks from when work resumes with the FAA, to when flights launch. "If we get started quickly, we could be flying in March but I don't see a path to us flying in February," he says.
The US government partially shut down on 22 December, forcing hundreds of thousands of federal government employees to work without pay or stay home. Southwest says it is estimating a negative impact of $10 to $15 million on revenue in January as a result of the partial government closure. The airline is the largest carrier at Baltimore/Washington airport, one of three airports serving the greater Washington DC area. Southwest president Tom Nealon says a "small piece" of the airline's business travel segment is tied to government travel.
Calling the shutdown "maddening", Kelly warns that a prolonged shutdown could derail the airline's near-term revenue outlook for the first quarter, which so far appears strong. "Everyone needs to be on notice and on guard that this shutdown could harm the economy and harm air travel," he says.
Source: Cirium Dashboard
