Southwest Airlines has announced a series of near-term goals, actions, and initiatives in support of a 10-year plan to maintain carbon neutrality to 2019 levels while continuing to grow its operations.

The Company plans to achieve these objectives through the following actions:

• Reduce its carbon emissions per available seat mile (including scope 1 and scope 2 emissions) by at least 20 percent by 2030 through fleet modernization, route optimization, and other initiatives.
• Replace 10 percent of its total jet fuel consumption with sustainable aviation fuel (SAF) by 2030.
• Offset emissions by providing the first U.S.-based airline carbon offset offer with loyalty points and for every dollar contributed toward offsetting Southwest’s carbon emissions, Southwest will match the contribution.*

*Taxes and fees will not be matched by Southwest or earn points. Southwest’s contribution may be used to purchase offsets for Southwest from any carbon offset project of Southwest’s choice. Rapid Rewards® Members can earn 10 Rapid Rewards bonus points per dollar contributed towards the purchase of offsets for Southwest up to a maximum of 500 Rapid Rewards bonus points per month. Points will only be awarded to the Rapid Rewards Member’s Rapid Rewards account number entered at the time of the carbon offset transaction.

Southwest’s 10-year plan to maintain carbon neutrality to 2019 levels while continuing to grow its operations includes plans to reduce, replace, and offset. In addition, the Company will continue to partner with organizations and nonprofits whose work complements its efforts to improve environmental sustainability and will invite Customers to join in this effort to show kindness to our planet.

The scope of Southwest’s Sustainability efforts extends well beyond a ten-year time horizon. The ultimate objective is to achieve carbon neutrality by 2050, and there is significant work underway directed at this ultimate objective. An important step in that long-term plan is a tangible strategy and clear set of actions for the next ten years.

Reduce
Southwest plans to continue reducing its carbon emissions intensity by:

• Modernizing its fleet with more fuel-efficient Boeing 737 MAX 7 and 8 aircraft. Southwest has extended its order book through 2031 with plans to accelerate  737-700 retirements and invest more than $10 billion in new and existing firm aircraft orders to further improve fuel efficiency and reduce carbon emissions.
• Continuing to work with the Federal Aviation Administration’s (FAA) NextGen program in an effort to modernize the U.S. air traffic control system by addressing limitations on air transportation capacity and making more efficient use of airspace.
• Electrifying eligible ground services equipment, increasing the current fleet of more than 1,400 electric-powered vehicles.
• Adding to the Company’s more than $630 million investment in fuel efficiency initiatives since 2002, implementing, as an example, new technology to monitor fleet utilization

Replace
By 2030, Southwest plans to replace 10 percent of its total jet fuel consumption as sustainable aviation fuel by:

• Establishing a partnership with Neste for up to 5 million gallons of SAF through December 2023.
• Working with Marathon Petroleum Corporation and Phillips 66, furthering its announced memoranda of understanding, to facilitate the development and production of SAF at significant scale.
• Engaging with Deloitte, Siemens, and Zurich North America for SAF beta partnerships to help support Southwest’s utilization of SAF in its operation.

Offset
As Southwest implements long-term plans and explores new technologies in the short-term, it also is taking steps to offset energy consumption and engage both individual and corporate Customers on opportunities by:

• Partnering with ChoooseTM and Customers to offset Southwest’s carbon emissions by providing the first U.S.-based airline carbon offset offer with loyalty points and for every dollar contributed toward offsetting Southwest’s carbon emissions, Southwest will match the contribution.*
• Launching the Green Incentive Program, a Southwest Business performance-based incentive program that provides corporate Customers the opportunity to earn and use funds for their company’s sustainability initiatives, which could include offsets or other initiatives.
• Sourcing 100 percent renewable electricity as of May 2021 for the carrier’s Dallas corporate campus through the purchase of renewable energy certificates.

Partner
In addition to the goals announced above, partnerships will play a crucial role in Southwest’s sustainability efforts, along with government support and collaboration throughout the entire value chain, including:

• Making a $10 million commitment to Yale’s Center for Natural Carbon Capture to research technological advancements and find new solutions to reduce net greenhouse gas emissions and to Yale’s School of the Environment to explore the current state of sustainability, strategy, policy, and economics.
• Continuing Repurpose with Purpose, a global sustainability initiative that upcycles items such as leather seat coverings and transforms them into new products. Through Repurpose with Purpose, Southwest Airlines supports communities by helping to provide employment, skills training, and donated products. In 2020, nearly 140,000 pounds of leather seat covers were repurposed, helping Southwest reduce the amount of waste sent to landfills while also generating social and economic opportunities for communities.
• Working with a variety of organizations and nonprofits, including Airlines for America (A4A), whose work complements our sustainability efforts, as well as government entities in supporting investments and incentives to help the industry meet its goals.

Southwest Airlines extends a tremendous apology to our Customers and Employees for the flight cancellations and delays which occurred over the weekend and on Monday.

On Friday evening, the airline ended the day with numerous cancellations, primarily created by weather and other external constraints, which left aircraft and Crews out of pre-planned positions to operate our schedule on Saturday. Unfortunately, the out-of-place aircraft and continued strain on our Crew resources created additional cancelations across our point-to-point network that cascaded throughout the weekend and into Monday.

Southwest Teams have been working diligently to restore stability to the network, and we are experiencing less disruptions on Monday. We hope to restore our full schedule as soon as possible. As a note, the operational challenges were not a result of Southwest Employee demonstrations.

To every Customer that experienced a cancellation or delay, Southwest offers our sincerest regret regarding disrupted travel plans, and we look forward to a future opportunity to demonstrate our safe, reliable, friendly, and legendary Southwest Hospitality – something that Customers should always expect from Southwest Airlines.

Southwest CEO on the airline’s Covid vaccine push, flight fiasco:

From CNBC:

JIM CRAMER: Southwest shares are edging higher this morning, thank heavens. The airline is hoping to normalize the schedule by tomorrow. Normalize is an odd term because I expect normal from Southwest. The wave of cancellations in the past few days, wave in cancellations let’s go back earlier in the spring. This is suboptimal. So, joining us now is Southwest Airlines Chairman and CEO Gary Kelly. Gary, I got to tell you, you do not shy away. I said you got to come on and here you are. Gary, because you are so good and so deserving of the respect, could you please tell us what you see going on because this is not you and it’s not southwest.

GARY KELLY: Hey, morning Jim. Great to be with you. Yeah, I know it’s been a really rough weekend and obviously I really feel for our customers and our people that are trying their best to serve our customers but when an airline gets behind, it’s hard to catch up. So, if you go back to Friday, basically the FAA had a series of delay programs that were implemented that covered all of Florida, every single one of our stations including a seven-hour ground stop at Orlando. You’ll have to ask the FAA what was the cause of all of that, but about half of our airplanes touch the state of Florida. We’re one of the largest airlines in the country. So, by the end of the day we had significant numbers of airplanes and flight crews that were totally out of position and as any, again, any aviation expert knows it just takes several days to get everything back aligned so we had a pretty good day yesterday. Far fewer cancellations than what we were experiencing Saturday and Sunday. And today was pretty much shaping up to be a normal day. As usual we have other issues that we have to deal with whether it’s weather or other ATC delays across the country but for the most part, today’s pretty much back to normal.

CRAMER: Okay, Gary, I understand that the weather-related issues. Florida didn’t really see that much cancellations from other companies in your industry, but there’s a lawsuit that was filed, filed Southwest Airlines Pilots Association, it’s in the Northern District of Texas. And what disturbed me about it, this was earlier this year, is they say that basically you’re using illegal tactics are a form of asymmetrical warfare negotiations. Gary, Gary, you know when you read this and then you read about the Texas governor says, listen we can’t, we’re gonna be against mandates. I see. Well, wait, wait a second, maybe vaccines are an issue, maybe labor problems of which Southwest Air has not historically had so you understand how we quickly just pivot from Florida and FAA to wondering what happened here with the pilots?

KELLY: Well yeah, again, I think that we’re uniquely affected because we have so many of our flights that touch Florida. All the airlines were impacted on Friday, it was just more of an impact on us and it just took us longer to recover. But all of our employees worked very hard through the weekend and it’s, it’s tough on our customers but it’s also tough on our people so they did a phenomenal job. There’s absolutely no, no issue in working with our employees. Talking about the vaccine mandate, oh yeah, I mean there are some that have very strong views on both sides of that issue and, you know, it’s not as I think you probably know, I’ve never been in favor of corporations imposing that kind of a mandate. I’m not in favor of that, never have been. But the executive order from President Biden mandates that all federal employees and then all federal contractors which covers all the major airlines have to have a mandate vaccine in place by December the eighth so we’re working through that. We’re urging all of our employees to get vaccinated. If they can’t, we’re urging them to seek an accommodation either for medical or religious reasons and my goal obviously is that no one loses their job. The objective here obviously is to improve health and safety, not for people to lose their jobs. So, yes, we have some very strong views on that topic but that’s not what was at issue with Southwest over the weekend.

CRAMER: Alright but I still want to go over this. United has only 3% people who are not vaccinated. Delta, you have a $200 monthly surcharge healthcare if you don’t get vaccinated. What do you have to make it so people get vaccinated and if they don’t, what is the procedure?

KELLY: We’re encouraging them and we’re offering the equivalent of two days pay for them to turn in their vaccination card that compensates them obviously for the time that it takes and any aftereffects, you know, from the vaccine. So, it’s an encouragement and not, not any kind of a stick if you will.

CARL QUINTANILLA: Gary, all the same, the, the cancellations are being used by some to argue that this was a huge vaccine protest in the words of Donald Trump Jr. on Twitter in the past 24 hours. I mean, how much can you push back on that? You say it was not an issue but to what degree did it contribute to this problem at all?

KELLY: Zero. I mean, again, we look at all of our employee behaviors in terms of absenteeism, in terms of people volunteering to come in and pick up what’s referred to as open time, and they’re very, they’re all very normal. The president of our pilots union has been out talking to the media confirming all of that so I think people again that, that understand how airlines work, when you get behind, it just takes several days to catch up and the fact that we’re basically caught up yesterday and today supports, you know, the, the assertion that we’re making here but we were significantly set behind on Friday and it just takes several days to catch up.

CRAMER: Gary, I feel awful doing this but I got to go back in June. Two days, technical issues, 500 flights canceled. I want to step back for a second. You’re Southwest Air. I frankly don’t care that there were problems with Florida, with FAA, you’re Southwest Air. You solve these things. You have two outages, again, you had one in June. Maybe Southwest Air has to change its ways that it can’t be just shut down because of what Orlando, maybe you shouldn’t do that maybe you need to go more hub and spoke. This is your, your airline and everyone knows, never, never, no cancellations, no problems. The fact that I have to ask about labor, the fact that I have to ask about the outages, something’s wrong at Southwest Air.

KELLY: Well I think very fair criticism Jim and so I was simply answering the question of what happened here over the weekend, you know, not whether we should have been better prepared or have done something differently. So, we operate a linear route network, we don’t hub and spoke. We’re the probably the largest airline in terms of seats offered in the state of Florida. Again, every single airport in the state of Florida was impacted by this. So, it’s, it’s very unique. It’s very unusual. It wasn’t anything that Southwest caused. If you go back to the June outage, that was, that was us. That was a technology outage and those are, those are few and far between. But it’s been a rough summer and I’m not offering any excuses. Our customers didn’t get their best from Southwest Airlines is not what we want. We definitely are, we definitely have some staffing challenges as well that we’ve talked about before so we have moderated our flight schedule and accelerated our hiring plans so there were definitely steps underway to, to mitigate the issue. We were thinly staffed coming into the weekend and that certainly didn’t help things as we were trying to recover but point well taken, and, you know, it’s, as usual, any company is a work in progress and we’ve always got opportunities to improve and you get no argument from me that this is not, not the kind of service that we want to offer from Southwest.

CRAMER: Fair enough.

DAVID FABER: Hey Gary, it’s David. I mean when, when it comes then to those opportunities to improve, where is your, and by the way the next CEO, where is the focus going to be on that improvement given what you’ve seen both this weekend and obviously from June? I know not necessarily related, separate issues but still.

KELLY: Yeah not related at all but I think in the, in this particular case, it would help for us to have better tools to recover. So, there, there aren’t perfect optimization tools to re-flow airplanes when we have a setback like we did on Friday. And then, secondly, there’s technology that’s required to reschedule our flight crews, so we have flight attendants, we have pilots, we have airplanes and once it gets behind, it’s just difficult to get that back together so I think the opportunity is to improve on that process. It’s called repair. It’s complicated, but we definitely have some good opportunities there, you know, for the future.

QUINTANILLA: Gary, finally there’s some commentary from some of the other carriers today about the holiday season, preparing for robust travel period. Are you seeing that kind of booking in Q4?

KELLY: Yeah, I think, you know, on the business side of things, you have the Delta variant, the surge in cases that occurred, you know, beginning back in June and then eventually that has an impact on air travel and it suffers so that wave has turned over and we’ve definitely seen some improvement in, in bookings there so yeah we’re looking forward to a strong holiday season. And we just want to be very focused on offering a high-quality schedule and experience for our customers.

CRAMER: I want to go deeper on this weather issue. IBM has a weather product, the Wall Street Journal seemed to indicate that maybe it was not up to snuff. There are questions about whether you had spent enough money on IT during the 500 flight cancellation in June. Are you underspending on IT and have you over furloughed and therefore having trouble getting people back?

KELLY: All great questions. I think the answer is, you know, a very emphatic no, we’re not underspending. We suspended investing in some of our initiatives early on when the pandemic first unfolded in March, but we very quickly got back on track once the CARES Act Payroll Support Program came through and made sure that we continue to make those investments. The two technology outages that occurred back in June were human error so it wasn’t a lack of technological capability, it was simply, in one case, not adhering to a procedure. So, it happens to companies, you know, occasionally we just don’t want it to happen very often and obviously every time something like that happens, we, we tried to learn from it. We’ve deployed new technology for reservations, we’re in the process of deploying new maintenance, record keeping software that supports all of our aircraft, one of the largest projects we’ve ever undertaken, probably the largest deployment in the airline industry in history. So, we have wonderful technology, we have a wonderful technology department. They’re, they’re very well resourced. I think what like a lot of companies, we definitely are having some hiring challenges. We’re trying to get 5,000 people hired by the end of this year, we’re about halfway there. But overall technology’s in pretty good shape in terms of staffing and for the most part, our staffing challenges have moderated. I’d still like to have more cushion in the operation so we can absorb the kind of blow that we saw last Friday better.

CRAMER: Alright, thank you Gary Kelly, Chairman & CEO of Southwest Air. Good luck to you sir. Appreciate you coming on “Squawk on the Street.”

KELLY: Thank you sir. You bet.

https://www.cnbc.com/video/2021/10/12/southwest-ceo-on-the-airlines-covid-vaccine-push-flight-fiasco.html

Southwest Airlines has informed its employees they must be vaccinated against COVID-19 by December 8, making it the latest carrier to impose this requirement.

From CNBC:

https://www.cnbc.com/2021/09/23/southwest-airlines-next-ceo-says-carrier-will-cut-flights-next-year-if-staffing-falls-short.html

The Maryland Board of Public Works today approved two contracts for the construction and operation of a major Southwest Airlines maintenance facility at Baltimore/Washington International Thurgood Marshall Airport (BWI). The Board, chaired today by Lt. Governor Boyd K. Rutherford, approved a $44.6 million construction contract to develop the site and lease agreement for Southwest Airlines to build and operate the maintenance facility.

“This is a particularly exciting project and long-term partnership that will benefit the State of Maryland for years to come,” said Lt. Governor Rutherford. “This would be another key maintenance facility for Southwest Airlines, and enhances an established long term and strategic relationship. Our administration continues to support BWI as a major transportation hub, as well as a catalyst for tourism, trade, and economic development.”

The 27-acre site will include a hangar to accommodate up to three Boeing 737 aircrafts and an apron space to accommodate up to eight Southwest Airlines jets, along with associated office and workshop space. The maintenance facility cost is estimated around $135 million, which includes an investment of approximately $90 million from the airline.

“Southwest Airlines began serving BWI Marshall Airport 28 years ago, and we are honored to demonstrate our ongoing commitment to the airport, and to Maryland, by progressing with plans to build a first-class maintenance hangar to support our Employees and Customers,” said Landon Nitschke, Southwest’s Senior Vice President of Technical Operations. “We appreciate the State of Maryland for the continued support of Southwest’s growth, investment, and presence at BWI Marshall Airport. We look forward to marking this next milestone in Southwest’s continued service to the region.”

“This action today underscores the longstanding, successful partnership between Southwest Airlines and the State of Maryland,” said Maryland Transportation Secretary Greg Slater. “As our economy and our transportation networks continue to recover from the effects of the pandemic, this is a project that will benefit the airport and the airline while supporting jobs.”

The new maintenance facility will be the first in the Northeastern United States for Southwest Airlines. Southwest Airlines currently serves about 70 percent of passenger traffic at BWI. According to the airline, there are more than 4,000 Southwest employees at BWI, including technical and maintenance personnel.

“We thank the Board of Public Works for supporting this major addition,” said Ricky Smith, Executive Director for BWI Marshall Airport. “For more than 25 years, Southwest Airlines has served our market with excellent customer service and efficient flights to many domestic and international destinations. We look forward to this next chapter of the airline’s history at BWI Marshall Airport.”

BWI has seen a strong rebound in passenger traffic as the state continues its recovery from the pandemic. While still below 2019 figures, the airport’s departing passenger traffic in August was up 120% from the same period in August 2020. About 95% of airport food and retail concessions are now open at BWI.

Southwest Airlines is joining other airlines by offering incentives to vaccinated employees.

The airline’s incentives include 16 hours of extra pay to vaccinated employees who show proof of vaccinations and it will pay for 13 trip segments for pilots and flight attendants.

The airline will also terminate COVID-19 pay protections for staff after November 15 if they are unvaccinated.