Southwest Airlines is betting on the hiring of employees rather than a sustained retreat of Covid-19 to solidify its operation and stay on the path of profitability. Prior to Omicron's arrival in the USA in December, the Dallas-based low-cost carrier had in 2021 suffered through waves of staff shortages and flight cancellations amid fluctuations in demand. Southwest began 2022 with yet another wave of flight cancellations, thanks to Omicron. Roughly 5,000 of Southwest's employees tested positive for Covid-19 during the first three weeks of January, incoming chief executive and current executive vice-president Bob Jordan said during an earnings call on 27 January. Staff shortages and winter weather forced Southwest to cancel 3,800 flights during the first week in January. Daily flight cancellations peaked at 672 on 6 January, data shows. Cancellations had subsided by mid-January, as had the rate of Covid-19 infections among Southwest employees, the carrier says. "Over the last few weeks the operation has stabilised," Jordan says. "Yesterday we were 95% on time. Covid case counts are on a downward trend." Southwest intends to hire 8,000 full-time salaried employees in 2022. Additionally, the carrier is raising starting wage rates from $15 to $17 an hour. "The labour market continues to be a challenge," says Southwest's finance chief Tammy Romo. "The impact of Omicron on staffing has affected our capacity outlook by about four [percentage] points." Southwest executives note that 2021 did not play out as expected. Leisure demand has proven to be resilient but demand for business travel remains down 50% versus 2019 levels, stifled by the delta and Omicron variants. "What we experienced in 2021 was pretty humbling," says chief executive Gary Kelly, who is stepping down on 1 February. "A year ago, I would have never bet that this is where we'd be right now. I thought the pandemic would have been well behind us by this point." Kelly points to business travel as a "perfect example" of how Covid-19 has continually scrambled expectations. "We were hoping for stronger business travel in January and February than what we're getting. International travel fits into the same category." Incoming chief executive Jordan echoes Kelly: "It's all a guess at this point." Jordan says Southwest's ability to withstand the impact of future Covid-19 variants "all comes down to hiring". "We have got to run a reliable operation and we've got to have enough staff to do it. We need pilots, flight attendants, ramp staffing. You need the appropriate amount of buffer until we're past Covid… We just need to get the staffing levels to where we can operate our aircraft." He adds that concerns about Southwest's staffing limitations have led the carrier to reduce its first-quarter capacity by 5-6%. Southwest's capacity plans for the second quarter of 2022 are contingent on the success of its hiring. "We have to see how things go on the staffing front," Romo says. She adds that Southwest will accelerate the retirement of its Boeing 737-700s if capacity needs to be reduced. The all-Boeing 737 carrier has 460 737-700s in its fleet, fleets data shows. The carrier expects operating revenue in the first quarter will be down 10-15% versus the first quarter of 2019 on a 9% reduction in capacity. Non-fuel unit costs are expected to be up 20-24% in the first quarter, in part due to operational disruptions in January. Similar to other US carriers, Southwest has seen bookings for March travel improve after declines for January and February travel. Expected losses in January and February come on the heels of a profitable fourth quarter of 2021. Southwest made an operating profit of $195 million in the period ending 31 December, compared with a $665 million operating profit in the fourth quarter of 2019. "I'm delighted to be able to say there were earnings [in the fourth quarter]," Kelly says in what was his final earnings call with Southwest, which he joined in 1986. The carrier ended 2021 with $16.5 billion in liquidity.

Australia’s Qantas has opened a new pilot training facility adjacent to Brisbane airport, with the capacity to train up to 900 pilots a year. The Qantas Group flight training centre features four aircraft simulators – for Boeing 737, 767F, 787 and De Haviland Canada Dash 8-400 aircraft – as well as a Q400 flight training device, Qantas says in release today. It adds that these are used by pilots to complete their four annual sessions of simulator training and specialised training when moving to a new aircraft type. The simulators were relocated from Sydney to make way for a major road project and were re-installed at the new centre over a four-month period. The airline says the Brisbane centre, along with expanded facilities in Melbourne and a new flight training centre to be developed in Sydney, will provide “significant cost savings” through training pilots at their home base. The facility will provide reoccurring training for the airline’s 500-plus Queensland-based pilots as well as pilots from other states and many of the new pilots who will join the Qantas Group in the years to come. Construction commenced in March 2021 and the four simulators and flight training device are active round the clock with up to 50 pilots and trainers using the centre each day. The facility will also be open to other airlines in the Asia-Pacific region to train newly recruited pilots, upskill pilots to new aircraft types and allow experienced pilots to maintain their ongoing training. Qantas Group chief executive Alan Joyce says “it would improve the efficiency of the airline’s flight training function and added to Qantas’ sizeable footprint in Queensland”. The facility will be staffed by 33 team members including 18 new roles for highly skilled simulator instructors, simulator technicians and support staff.

India’s flag carrier Air India has been officially handed over to the Tata Group. The group says it took ownership of the carrier and its management on 27 January following the completion of the transaction for the purchase of the airline from the government of India. The Mumbai-based conglomerate was selected as the new owner of the airline by the government in October 2021. The transaction covers three entities – Air India, Air India Express, and AI SATS. Air India Express is a low-cost carrier, while AI SATS provides ground handling and cargo handling services. "We are excited to have Air India back in the Tata Group, and are committed to making this a world-class airline," Tata Sons chairman Natarajan Chandrasekaran says. "I warmly welcome all the employees of Air India, Air India Express, and AI SATS to our group, and look forward to working together," he adds.