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Southwest will stop blocking middle seats and fill planes to capacity after WHO says in-flight transmission risk is 'very low' and the airline tries to recoup after a record $1 billion loss

Southwest Airlines has announced it will sell every available seat on flights starting December 1, joining United and American in a bid to increase revenue. 

The airline had been keeping open middle seats on many flights to enable social distancing among passengers however the company warned on Thursday that until a COVID-19 vaccine was made widely available, passenger traffic would remain fragile. 

Southwest referenced recent medical research about the coronavirus showing that the combination of air filtration on airplanes combined with face masks 'make the risk of breathing COVID-19 particles on an airplane is virtually non-existent.'

It said the practice of keeping middle seats open had bridged it from the early days of the pandemic, 'when we had little knowledge about the behavior of the virus, to now.'  

Southwest announced record quarterly losses over over $1 billion on October 22. The airline also said it would stop the practice of blocking out middle seats [above] starting December 1

Southwest announced record quarterly losses over over $1 billion on October 22. The airline also said it would stop the practice of blocking out middle seats starting December 1

Southwest has thus far avoided furloughing employees by asking workers to accept pay cuts

Southwest has thus far avoided furloughing employees by asking workers to accept pay cuts

Ridership on US foreign and domestic flights rebounded over the summer after bottoming out during the most severe lockdowns during the spring. Still, US airlines are carrying only a fraction of the passengers they did last year

Ridership on US foreign and domestic flights rebounded over the summer after bottoming out during the most severe lockdowns during the spring. Still, US airlines are carrying only a fraction of the passengers they did last year 

WHO'S BLOCKING MIDDLE SEATS?

Alaska - Blocked until January 6

American - No block

Delta - Blocked until first half of 2021 

Southwest - Blocked until Nov. 30 

United -  No block

Customers will receive an email Friday if they've purchased tickets for December 1 onward. Any refunds must be requested by October 31.

Southwest will notify customers two or three days before a flight if the plane is going to be full and they can transfer their ticket if necessary. 

Delta plans to stop blocking seats in the first half of next year. Alaska Airlines said it is blocking middle seats through January 6.

American and United have long tried to fill every seat. 

Southwest said it turned away $20 million in ticket sales in September and estimated it could lose $40 million in November. 

With business travelers sidelined, airlines are more dependent on price-conscious leisure flyers. Southwest believes business travel could still be just 50% to 60% of normal by the end of next year, and up to 20% might be lost forever, Southwest President Tom Nealon said.

The average Southwest customer paid 20% less than a year ago. The airlines are slashing costs to survive on a fraction of their usual revenue.

The Dallas-based company reported a net loss of $1.16 billion, or $1.96 per share, in the third quarter ended September 30, compared with a profit of $659 million, or $1.23 per share, a year earlier. 

On an adjusted basis, the company lost $1.99 per share. Total operating revenue fell 68.2% to $1.79 billion. 

The airline forecast fourth-quarter average core cash burn of about $11 million per day, compared with $16 million per day in the third quarter and $23 million per day in the second. 

American Airlines has long tried to fill every seat. It announced that it expected its system capacity in the fourth quarter of 2020 would be just over half what it was in the same period last year

American Airlines has long tried to fill every seat. It announced that it expected its system capacity in the fourth quarter of 2020 would be just over half what it was in the same period last year

RISK OF IN-FLIGHT COVID SPREAD 'VERY LOW' - SAYS WHO 

Airline groups and aircraft manufacturers, relying in part on research by the military, say that strong cabin air flow and high-efficiency filters make planes safer than other indoor settings. 

Global airlines body IATA said on October 8 that only 44 potential cases of flight-related transmission had been identified among 1.2 billion travelers this year, or one in every 27 million passengers. 

But the presentation was later challenged by one of the scientists whose research it drew upon.

Dr David Freedman, a US infectious diseases specialist, said last week he declined to take part in an IATA briefing on the risks because a key assertion about the improbability of catching COVID-19 on planes was based on 'bad math'.

IATA responded that its calculation remained a 'relevant and credible' sign of low risk.

The WHO said it knew of at least two case report studies that described in-flight transmission, on flights from London to Hanoi, and Singapore to China.

Sick passengers and people with confirmed exposure to COVID-19 should not be allowed to travel, it said. It added, however, that ventilation systems on modern jets could filter viruses and germs quickly.

'In-flight transmission is possible but the risk appears to be very low, given the volume of travelers and the small number of case reports. The fact that transmission is not widely documented in the published literature does not, however, mean it does not happen,' the WHO said in a statement to Reuters.  

Southwest has not tapped the federal loan fund. Southwest said it would need to roughly double the $1.79 billion in revenue it booked in the third quarter to reach cash burn break-even, though CEO Gary Kelly told investors its $15.6 billion in liquidity is enough to last at least three years. 

Airlines have parked jets and retired aircraft due to depressed demand. 

However they are offering upbeat forecasts about Thanksgiving and Christmas travel. Southwest President Tom Nealon said that a recent increase in confirmed COVID-19 cases doesn't seem to be hurting holiday bookings. That's a sharp contrast to July, when a spike in the virus across the Sun Belt choked off a rise in travel.

'Perhaps because you're not seeing as many hospitalizations and deaths, although both are rising right now, I get that,' Nealon said. 'But perhaps people haven't been as concerned about it as they were in the past.'

Southwest CEO Gary Kelly on Thursday urged Washington to approve more pandemic relief, including a six-month extension of $25 billion in aid to airlines. 

The Payroll Support Program of the CARES Act expired this month. Without it, he said, his airline can't afford to maintain jobs and full pay.

For its part, Southwest has thus far avoided furloughs by asking its employees to take pay cuts. 

The airline's debt position is among the best in the industry. However on Wednesday the Dallas Morning News reported that the company could get cabin crew to sell credit cards to prevent a pay cut. 

Many airlines usually advertise their partnerships around the airport and on in-flight channels, but cabin crew have been reluctant to actively push the cards. However in the past United and American have offered incentives for it. 

The suggestion was raised during a meeting with the Transport Workers Union Local 556, which represents 15,000 employees. 

Southwest plans to cut pay for nonunion workers by 10% in January and has demanded unions accept lower pay or risk furloughs.  

'We urge our federal leaders to pass an economic relief package that includes a clean, six-month extension of the Payroll Support Program to further protect jobs and crucial air travel,' Southwest Chief Executive Officer Gary Kelly said. 

Southwest, which flies only Boeing 737s and has also agreed to take no more than 48 MAX aircraft through 2021, said it was also discussing additional delays.

Southwest said on Thursday it probably will not fly the jets until at least the second quarter of 2021. 

Air travel in October is still down 65% from a year ago. Business travelers, who fly more often and pay higher fares, are still mostly absent. Travelers are seen at the American Airlines check-in counter at Los Angeles International Airport in Los Angeles, California on October 1

Air travel in October is still down 65% from a year ago. Business travelers, who fly more often and pay higher fares, are still mostly absent. Travelers are seen at the American Airlines check-in counter at Los Angeles International Airport in Los Angeles, California on October 1 

American Airlines chairman and CEO Doug Parker (C), speaks alongside other airline executives, including Delta CEO Ed Bastian (L), United CEO Scott Kirby (2nd L), Hawaiian President and CEO Peter Ingram (3rd L), Southwest Airlines Chairman and CEO Gary Kelly (3rd R), Airlines For America President and CEO Nicholas Calio (2nd R), and Alaska President and CEO Brad Tilden (R), are pictured following a September 17 meeting at the White House about extending economic assistance

American Airlines chairman and CEO Doug Parker , speaks alongside other airline executives, including Delta CEO Ed Bastian , United CEO Scott Kirby (2nd L), Hawaiian President and CEO Peter Ingram (3rd L), Southwest Airlines Chairman and CEO Gary Kelly (3rd R), Airlines For America President and CEO Nicholas Calio (2nd R), and Alaska President and CEO Brad Tilden , are pictured following a September 17 meeting at the White House about extending economic assistance

The MAX has been grounded since March 2019 after two fatal crashes. 

With little need for new jets, American said it had agreed with Boeing Co to defer deliveries of 18 737 MAX aircraft scheduled to be delivered between 2021 and 2024, and said it was discussing delivery delays with Airbus. American has said it could return the jets to service this year pending approval for software and training changes. 

The four largest carriers in the US have shed about 150,000 employees this year through voluntary or temporary leave. 

Without an extension to the airline relief package, the airline industry in the US began furloughing 50,000 workers this month. 

AA posted $2.4 billion in quarterly loss and announced on October 1 that it would furlough 19,000 employees.

American Airlines Chairman and CEO Doug Parker said a proposed extension of the PSP enjoys 'enormous' bipartisan support, but the failure of Republicans and Democrats to agree on a broader COVID relief package has blocked it. 

'Elections matter, but there's nothing polling higher than a COVID relief stimulus package,' Parker told investors on a call Thursday. 

American also said it will tap $7.5 billion in federal loans, more than initially forecast. 

Delta Air Lines plans to stop blocking seats in the first half of next year in light of recent advice

Delta Air Lines plans to stop blocking seats in the first half of next year in light of recent advice

Earlier this month, Delta Air Lines posted a $5.4 billion loss and furloughed 13,000 employees

Earlier this month, Delta Air Lines posted a $5.4 billion loss and furloughed 13,000 employees

American is burning through cash - $44 million a day in the third quarter compared to $58 million in the second quarter - at a much faster rate than Delta, United or Southwest. 

American signaled Thursday that it will raise another $1 billion by issuing new shares and will defer delivery of 18 Boeing jets to conserve cash.  

Demand for air travel has plummeted amid the global pandemic. April saw just 3.2 million passengers on US foreign and domestic flights, compared to 76.7 million in April 2019.

Even as US ridership rebounded slightly over the summer, US airlines served in July fewer than a third the passengers they did in July 2019, according to federal statistics. 

Carriers have cut flights and routes in response. American Airlines reported Thursday its system capacity would be slightly more than 50 percent what it was over the same period last year.

Earlier this month, Delta Air Lines posted a $5.4 billion loss and furloughed 13,000 employees. United Airlines lost $1.8 billion for the third quarter.

Combined with earlier losses reported by Delta and United, the four largest US airlines have lost at least $10 billion in each of the last two quarters. 

United Airlines lost $1.8 billion for the third quarter. United has long tried to fill every seat. Pictured, Ronyell Boudreaux, an operations manager at IAH George Bush Intercontinental Airport, demonstrates the use of an electrostatic disinfectant sprayer on a United Airlines plane in Houston, Texas on July 21

United Airlines lost $1.8 billion for the third quarter. United has long tried to fill every seat. Pictured, Ronyell Boudreaux, an operations manager at IAH George Bush Intercontinental Airport, demonstrates the use of an electrostatic disinfectant sprayer on a United Airlines plane in Houston, Texas on July 21

Alaska Air Group Inc. reported a loss of $431 million. Alaska said it is blocking middle seats through early January

Alaska Air Group Inc. reported a loss of $431 million. Alaska said it is blocking middle seats through early January

Additionally, Alaska Air Group Inc. reported a loss of $431 million. 

The Seattle company said that removing one-time gains and costs, the loss came to $3.23 per share, which was wider than the $2.86 per share loss predicted by analysts. Revenue dropped to $701 million, slightly better than Wall Street expected. 

It's an unprecedented nosedive that has caused the once highly profitable airlines to forage for billions of dollars in government aid and private borrowing to hang on until more travelers return.  

Airline shares moved higher in afternoon trading Thursday. Southwest and Delta were up about 6%, United about 4%, and American roughly 3%. 

Air travel in the US has recovered slowly in recent months, topping 1 million daily passengers on Sunday for the first time since March. 

However, air travel in October is still down 65% from a year ago. Business travelers, who fly more often and pay higher fares, are still mostly absent.

'Really the difference is going to be when business travelers start hitting the airways again, something that is modestly starting up but is nothing close to what we need,' American CEO Doug Parker told CNBC.

Delta CEO Ed Bastian said recently that 90% of his airline's corporate customers are letting some employees travel, but only a small number, and business travel is down 85% at his airline.  

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