Southwest will end its block on middle seats Dec. 1.
The move, said company executives during a its Q3 earnings call, is being made due to mounting evidence that Covid-19 transmission is especially rare on aircraft.
"We would not have made this decision without the overwhelming data that this doesn't put our team and our customers at risk," said Tom Nealon, the company's president.
Southwest executives in particular emphasized a Department of Defense study published last week, which found that small virus droplets known as aerosols, expelled from a sick passenger, have no more than a 3-in-1,000 chance of reaching the breathing zone of a passenger in the neighboring economy seat. The study assumed that mask wearing in flights is continuous, without interruptions for eating and drinking. It also didn't account for the potential for virus transmission through droplets, which are larger than aerosols and are also expelled through coughs, sneezes or speech.
Southwest CEO Gary Kelly said Southwest's own data, as well as the accumulated knowledge that has been gained about the infrequency of in-flight Covid-19 transmission over the course of the pandemic, also played a part in the decision. He said that Southwest is one of just five airlines in the world currently blocking middle seats.
"There is more than ample evidence that what we're doing is the right thing," he said.
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The company had committed to middle seat blocking through November. Instead of middle seat blocking, Southwest will inform customers several days ahead of time if a flight will be more than 65% full, Nealon said. The carrier will also give anyone who is already booked for a flight on Dec. 1 or after the option of taking a full refund.
Company executives didn't shy away from the revenue benefits Southwest will derive from ending its middle seat block. Nealon said Southwest took a $20 million hit due to seat blocking last month, and a similar impact is expected this month. The carrier projects the November impact will be $40 million to $60 million.
Revenue results topped analyst expectations
The Southwest seat-blocking announcement came as it reported results from another dismal quarter. The carrier suffered net losses of $1.16 billion from July through September, as revenues fell 68.2%. Still, those revenues, of $1.79 billion, topped analyst expectations by $80 million, according to the investment website Seeking Alpha.
Capacity at Southwest was down 33% year-over-year during the third quarter and is expected to be down 40% in the fourth quarter. Load factor in the third quarter was just 44.9%, compared with 83.5% a year earlier.
Southwest ended the quarter with $15.6 billion in liquidity. Core cash-burn for the quarter was $12 million per day, compared with $23 million in the second quarter. That $12 million figure doesn't include the approximately $300 million Southwest spent on employee leave programs, chief financial officer Tammy Romo said.
Traffic reductions during the pandemic have enabled Southwest to improve its on-time performance. The carriers was on time 94.2% of the time during the third quarter, its best quarterly performance in that metric since 1992, said chief operating officer Mike Van de Ven.