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Business as Usual: Southwest Airlines

Business as Usual

We are thrilled to kick off 2021 by welcoming Dave Harvey, Vice President at Southwest Airlines, to Business as Usual.

Get insight on the future of air travel as the battle continues against COVID-19 now and into the future. Dave will overview a number of topics ranging from how the pandemic has impacted the industry, new and continued safety measures, what air travel will like in a post-pandemic world and Southwest Airlines' presence at Pittsburgh International Airport.

Please join us for what will be an informative and engaging conversation.





So good afternoon, everyone. This is 2020. And I'm thrilled to be back, we took a long, few days off at the tech Council. And hopefully all of you have done the same. I'm Andre, I run the Pittsburgh tech council if we haven't had a chance to meet, glad to see all of you today. And I'm joined with Jonathan kersting, who is our right hand, and vice president of all things, media, and storytelling and marketing for the tech Council and our member companies. So Happy New Year, and I'm raising my glass of sparkling water to all of you to cheer into the to the New Year. I'm very, very excited to have our guest today, Dave Harvey, from Southwest air, I'm going to introduce him in a moment, just want to remind everyone a couple of things and give deep shout out to Huntington bank has been our partner all through COVID. And even before, but you know, if you know that the PPP, there's going to be another wave and that we will have some activity and support through leveraging our relationships with Huntington bank, for example, but we want to thank them for being our key partner in all things that we do that are new and innovative. And this is one of them. I also want to remind everyone that we have an organization that's a wholly owned subsidiary of the Pittsburgh Technology Council, and that's called 40 by 80. That's the longitude and latitude of Pittsburgh. And we are focused on all things entrepreneurial, and developing the workforce that we need right here in our region and making sure that we are inclusive, and we're affording equity for all those who live across Southwestern Pennsylvania and beyond. So I am pretty thrilled to just jump in and invite our guest, Dave Harvey, to the forefront he and we're going to talk a little bit to him. I also want to just remind everyone, we do have a chat session done section. So please be mindful of asking some questions. This is an opportunity for interaction. And of course, we put you on mute. But before we jump in and talk to Dave, I have like a great announcement that I want to shout that we are going to randomly pick one person for a giveaway for a round trip on South by Southwest. We're excited about that Dave's giving a thumbs up. But here's what I want you to do, I want you to send a note directly to Brian Kennedy, in the chat, if you're interested. And if you're really interested in flying. And we will at the end of the show, we will announce who that winner is. So that's a free round trip flight on Southwest. And thank you Dave Harvey. So Dave is the Vice President of Southwest air. And we're here to talk about air service. We're here to find out a little bit about Dave, and hopefully have some excitement for travel, right for travel. Because most of us who are on this call are people who are global citizens and citizens who like to travel and need to travel both for personal reasons and for business. So, again, Dave, thank you so much for being here and taking the time, tell us where you are, are dialing in and zooming in from.

Absolutely Thank you, Audrey. And thank you for the council just for a few minutes just to connect with you. I am sitting here in our headquarters offices at Dallas Love Field just crossed the runway. So just a stone's throw north of downtown Dallas.

Okay, and so tell us and hopefully you're safe and sound. And you've had a good and healthy 2020 despite a lot of the trials and tribulations that everyone has endured. So tell us you've had a storied career though with the airline. So tell us a little bit about yourself, you know, some of the work that you've done, including technology.

Yeah, absolutely. What one thing that's big, it's Southwest. And there's a lot of seniority. I'm in my 22nd year here, but we use a phrase go where you grow, which has limitations, they can't just throw me in the cockpit of a 737 and expect me to fly. But we really hire for attitude and aptitude. And if you've got an orientation toward customer service, both our internal and our external customers, then if you're a quick learn, we can we can throw you into a lot of different jobs. So crazy enough. I got my undergrad degree down at UT Austin and in management information systems in technology and started as a technologist and that that was my first love and I thought that was going to be my career. But about eight years into my career here at Southwest I was coming encode was the business analysts was leading development teams doing some project management, I got tapped. And asked to go to a new area kind of emerging area of the business corporate strategy. And thought I'm gonna go do that for just a year or two tour of duty, but then take my learnings there and go back to technology. And now I've been outside of technology for much longer than I was in. So corporate strategy, commercial planning, network planning, which is deciding where the aircraft go, then more business development roles, corporate sales, and now lead what we call Southwest business, which is our b2b sales and distribution engine here at the airline.

So what kind of tech did you work in during that piece of your journey?

Yeah, it was, it was old school. Some of those I, I can't even claim as actual technology I was I was cutting code and Java j TV. It was a lot of Microsoft Visual Basic, which is, you know, so it's kind of a jack of all trade back then in our Southwest history, where I point to point carrier versus a hub and spoke carrier, or getting to a certain scales, we only had about 200, we will only we had 275 aircraft, when I started now we've got almost 800. And you can't go to Sabre or lose the systems and buy these commercial off the shelf products, because everything was written for a hub and spoke carrier. And we were the most complex and scaled point to point. So we had to basically build everything ourselves, which made it fascinating for a technologist because we got to work with the business, understand requirements, and then go cut code to meet their needs. So it was it was kind of a wild wild west, we've grown up a little bit over the last 20 plus years,

right, but you have an appreciation for a lot of the work that some of our constituents are actually living in. So that's probably served you pretty well in terms of your career.

Oh, it's it's critical. Now you can't do I mean, there's very, very few things. An organization like a large airline. Everything is is complex touches a technology, you're looking for a new technology solution. Customers are travelers on the plane, they were running a customer service, customer oriented business, and they want innovation. They want no touch or very low touch at their fingertips. So we've got to have our finger on the pulse of just all the emerging platforms, and trying to figure out how we incorporate that into our tech plans.

That's great. I'm sure there are people here who would love to figure out some ways to be helpful and supportive in some of your tech strategies and implementations. So if they're interested, is there a way that they can reach out?

Yeah, absolutely. Brian and the team have my contact information or just connect with me on LinkedIn, just David Harvey's at Southwest air. And we can we can definitely strike up a conversation.

That's great. Thank you for being so open to that. Really appreciate it. So most of today's you know, attendees are definitely familiar with Southwest. But can you level set sort of the discussion about your overview of your presence here in Pittsburgh? You know, talk about maybe you know, where we were pre COVID. And how COVID has impacted us?

We just start Absolutely, yeah, so Southwest Airlines actually turns 50 this year, such a milestone year, so June, we will actually turn the big five oh, as an airline. And, you know, literally started out from very humble beginnings. In 1971. The whole model was written up on a cocktail napkin, a bar in San Antonio, Texas, where Herb Kelleher, Audrey who we were talking earlier, one of my honors Lamar muse, said, How do we get all these Texans out of their pickup trucks and get them into the sky? Let's give them you know, high quality service at a low fare. Herb. You're crazy. Let's do it. And now after 50 years, we are the largest carrier not only in the United States, we're the largest carrier in the world. We carry just shy of 25% of the entire US market share. So 17 was all about Texas 18 we expanded to neighboring states, our orientation was more south and west wasn't until the 90s where we got to the east coast wasn't until 2004 where we first started serving Pittsburgh, and I will note our current CEO Gary Kelly. Pittsburgh has a soft spot in his heart because that was the first station he opened. He took the reins in oh four and later that year. Open Pittsburgh is his first station In the 15 years, we've grown to Pittsburgh, we're now the number one carrier in Pittsburgh, we surpassed American a couple years ago. And we have about a four point market share advantage over American at this point.

Wow. So what so let's talk about COVID. Let's talk about how it's impacted. Obviously, it's impacted you tremendously. But what does that mean for Pittsburgh? What has it meant,

you know, Pittsburgh, and mini like market, it's been absolutely breathtaking. So I experienced 911, in the Great Recession. And this is both of those roll together times 100. The airline industry has never seen anything like this. Essentially, the way to think about it is the entire US industry, rewind, rewind the clock back to the 70s when Southwest started, and that's the travel demand where we sit right now. So it is not sustainable. We are very thankful to the US government for stepping up with the pay support, you may have seen over the break, a second round of payroll report, Southwest and our 50 years, we've never had a furlough or a layoff or a pay cut, we were going to do all three, we were literally within days of potentially impacting up to 7000 employees 10s of 1000s of other airline employees, were furloughed back on October one when the first round of payroll support went out there. So the the quick of it is, you know, airlines have had to right size, their capacity their networks, for this current demand environment. You know, you can't just keep flying empty planes, which is what was going on back in March and April, the good news, there has been an uptick in demand. But it's very, very choppy. Anytime there's an uptick in COVID cases, cancellations go up and demand goes down. And it's very, it's kind of state by state region by region where these hotspots will pop up. You know, clearly going into Thanksgiving and Christmas, there was a lot of messaging from governors and other officials, Hey, stay home, stay safe when we get that. here in a second, we'll talk about what Southwest has done to keep our employees and travelers safe. But it is really dampened demand, which is not a healthy thing. For the overall aviation infrastructure for the United States, we as a country, we need a vibrant and healthy transportation system, not just airlines, but all modes of transportation. And if something doesn't change here with kind of vaccine and testing, and a rebound in demand, it is going to dramatically shape the airline industry for years, if not the next decade. So to be blunt, you know, the airlines are kind of hanging on by a thread here, unfortunately. And that's that's really kind of cut back the service to markets like Pittsburgh.

Well, it's it's hard for any kind of business to have this kind of erratic demand, because I don't know how you plan. I don't know how you normalize, you know, the vacancies inside these planes. So I imagine that you're using some sort of statistical modeling, that that can help you optimize this. The Mark Freeman has a question, Jonathan, that leads me into the next one. So why don't you ask that?

This is a great question. I'm so glad he brought this up. So wants to know as a frequent Southwest customer, is there any chance that Southwest might consider Pittsburgh as a possible candidate as a future hub or mini hub? Given all the unused gates at Pittsburgh International, it would seem Pittsburgh might off for an advantage of being centrally located to populations within 600 miles plus with less weather related delays compared to busy hubs, like Philadelphia and Chicago.

Yeah, that is a great question. First Mark, thank you for your business. I won't make you hold up your your rapid rewards card or anything like that. Just teasing So, and I kind of hinted at that that earlier, where we're not our model, our operating model is not the hub and spoke where everyone kind of flows into a connecting bank, like what you used to have with with US Airways, so that bank had their full blown hub. To be candid, they were over serving the market, right or of people that needed to get in and out of Pittsburgh day in and day out. They were carrying all that connecting traffic. So the way to think about it on Delta united American today 75% of every traveler day connects over one of these hubs and 25% are flying nonstop. Southwest as the exact inverse 5% of our customers are flying nonstop. And then 25% Connect over a Chicago or a Baltimore, one of those other destinations. Now all that said, we are very bullish on Pittsburgh and I also described how much we've grown in the last 15 years. And we've overtaken American as the as the market leader. We we had aspirations we had plans kind of going into 2020. Pittsburgh, it was been the first time in its history was going to surpass 10 million annual customers 2020 was going to be the year nothing magic, about 10 million, but it is kind of optically that's a big stepping stone and be proud to be driving a lot of that traffic. So I think we just need to weather this current COVID storm. We've built up a great customer base there. Pittsburgh has a lot of things. When you think about tech, when you think about medical, the cost of living you seeing a lot of the population flee the the New York's and Chicago's in California, and they're coming to markets like Pittsburgh. So you guys are when we're thinking about where to put that next aircraft. You're high on that list of potential.

Tom? That's a question and lilium Jonathan.

Tom wants to know, what are Southwest plans for future verifications, such as like a digital health wallet in regards to immunizations being required for passengers to fly safely?

Yeah, there there is a lot going on there. And to be also direct with the I think a lot could change even in the next 30 to 60 days is the new administration kind of positions in if you look at the agenda, you know, clearly one of the big four items, is is all about how we get our arms in battle. It really is kind of a war analogy. COVID. So I do think that there's going to be new protocol. The question there was about digital wallets, you know, whether that is that wallet will show Have you been vaccinated or have been tested within 72 hours. So our customer experience teams and our technology teams are very much plugged in with Capitol Hill. And there's different task force teams about contact tracing. And about the digital wallet, you're seeing it, the early indicators are what's kind of going on in the international space. And also, it's been going out going on flying to the Hawaiian Islands, they push more stringent different testing protocols and those procedures. So you could kind of see all that taking the next step in more of a digital form is what I think is probably on the horizon. So we're plugged in, and we're making sure that both our travelers and our employees have what they need for whatever that new norm may look like. I last thing I would say there, I think everybody I think, as a country, we came out of the gate and stumbled a little bit on the vaccine distribution phase. And it's just a massive undertaking, you know, warp speed. From what we're seeing, you know, we were country was trying to get out 20 million doses. At the end of December, it was only like 12 million, and only about 4 million were in people's arms. So we've got some catching up to do. But it looks like that whole supply chain is about to really get geared up. First responders, frontline, high risk categories, we got to get them covered in the next kind of 60 days, and then start getting it out to the next waves. You do see a path here call it by June one July one, we're we're getting much closer to herd immunity. And that'll be a big Oh, people will be visiting Grandma and Grandpa, again, are taking that business trip again. So Laurie is on the way.

So there's a question about the customer experience from Lillian, can you

talk about? Definitely. So Southwest has always been a leader in customer experience. And I 100% agree. And that they obviously use that as one of your main differentiators, never charging change fees, etc. Now that other airlines have adopted that model because of the pandemic, how do you think Southwest will continue to innovate and stay ahead of the trends and differentiate yourself and appeal to weary travelers at this point?

Yeah, that's a great question. So there's a little bit there on the customer experience with COVID. And we've kind of been to market back in late April with our Southwest promise and it's a multi layered approach. There's no silver bullet or single bullet in trying to protect everybody with COVID. So it's all about distancing and cleanliness and the masks and the air filtration and kind of that that multi layered approach. That's it's a really getting a lot of confidence both from our employees and our travelers, then when you think about some of the differentiators and the direction that some of our competitors have taken, at the end of the day, no airline is flexible when we think about no bag fees, no change fees, no blackout dates, the most flexible, most rewarding rapid award program could kind of go on and on and on. Yes, some of our competitors have started doing things like no change fees, using the word permanent. You know, we'll see here in about 12 to 24 months, if that's a minute, there's billions of dollars of revenue that are driving their overall business that if that's permanent, they're walking away from that? Well, we'll see. But I would just say, if you look at the fine T's and C's have a lot of that language, a lot of strings attached. And there's a lot of Yeah, but so you know, Southwest, you can have a lot of confidence, bags, fly free, no change fees, ultimate flexibility, and there's no strings attached there. And I think that really generates the confidence in the traveler that their tickets, their funds are good with Southwest. And there's not going to be any gotchas.

I agree. You have a couple more questions, Jonathan,

that I'd like to be asked. Absolutely. So we were actually talking about this before we're going live and from Sanjay Chopra, regular of the show here wants to know, your plans with the Boeing 737. max.

Yes, we are, we are excited to bring the max back online. Stand, that's also a major consumer confidence. You know, before COVID, we were spending a lot of time. And we've got a lock solid plan and return to service and huge education campaigns and exactly what our pilots and our flight attendants and our mechanics are doing to get the planes ready and the training. So you're going to start seeing a lot more of that here in the next 60 days are our first date were ours, our max will be back in service is March 11. But the I would say before COVID, as we were doing a lot of surveying to the customers, it was clear there's a segment of the population. They they really feel like that plane has been under the microscope, it's going to be the safest plane in the skies. And we'll go back day one. Travelers, the other end of the spectrum, I'm never getting on that thing. And then there was a bunch in the middle that just said, Hey, give me six months. You know, I don't want to be a leader in this regard. Let's, let's make sure everything's good. So what I would say is that we've got work to do. Boeing, clearly had some missteps, and they've kind of owned up to that two years ago, what what led to those kind of terrible fatalities. So but I would submit to you, it has been scrutinized and scrutinised again, the plane is actually a much better customer experience, we were talking about this, it's 40% quieter, it also is a if you think about the seating configuration and the slim fit materials on the seats, you actually have more living space, effectively more living space, more room, and the plane flies about 500 more miles, because it's more efficient. So it just allows you to fly nonstop to more great destinations on outwest or whoever you're flying. So it is the aircraft of the future. There's a lot of work to do and much more to come here in 2021 on its reentry.

So we have we have two more questions. I think so ROMs question will be something that will be man that might be mandated by the federal government, you know, teams being mandated. Hopefully, no, but I think that would come from our federal government. Right, Dave? Correct. And then what about Clinton's question?

This equipment is what's know more about like what you're currently doing now to make sure that people are safe while flying on Southwest Airlines.

Yeah, there's a there's a whole suite of thing. So and I hinted on some of this if you think about every, every night, any aircraft going into service the next morning is undertaking six hours of deep clean. So think all the sanitation the wipes the the teams going through. And the big underpinning of that is you know, a lot of the techies on the on this call will get this. We use an anti microbial spray. It's an electrostatic sprayer that literally grips it's EPA and FDA approved for 90 days and it literally grips on to the the seats themselves, the tray tables, the armor The bins the lavatory, and its mission is to sit there waiting for germs and viruses to make contact and it kills them. And then all the sanitation and wipes on top of that, we also between every single flight, we have a team that comes to cleans the plane again, it is a strict enforcement of the Mac mask. If you're over the age of two, ie you're not a lap child, you will not get on our plane. And if you take your mask off, and our flight attendants treat it like a seatbelt, if you were to take that mask off, they're going to come in and work with you one on one, try to do it and defuse the situation, but we will actually divert aircraft or have law enforcement waiting upon arrival if somebody does not take the mask seriously. And SPS is the heppa filters just like you have it hospitals, other medical facilities, it is getting 99.97% of all airborne particles out of out of the air. And people don't realize this, but the Boeing 737 it recycles air fresh air from outside of the cabin every two to three minutes. So that is going on for the entirety of the flight. If you think about it, it comes in above your head and expels all the air at your feet. And that's going on every two to three minutes flowing through the filters with the mask. A lot of studies from Harvard and other credible sources have literally said your chances of getting COVID onboard an aircraft is lower than getting struck by lightning walking down the street. That's low odds are significantly lower than contracting it at your local grocer, your local restaurant that you may be visiting. So it is a very, very low risk safe environment to to take and take a trip.

So we we have a few minutes left. And I want to squeeze a question and before we announce our winner, but there's a question that Alina Roberts has asked that I was going to ask about culture. And I think she's saying here she's checked out your zoom background, she's done a little bit some detective work and saying it looks like you've got a fun mix of family and some swag. What message would you say you're conveying about yourself as a leader and and about the culture at Southwest?

Yeah, absolutely. Our, our economics, our wheel of how we do things, it is all about our and this is very unique. It's about putting our employees first, which sounds kind of counterintuitive, but if you put your employees First, take care of them have a great corporate culture, let them be themselves, you know, work hard, play hard. You know, safety is never, never a question there. But let let them just be their own personality and let their hair down. Very diverse and inclusive, you do those things, they're going to be motivated to do great work for southwest and take great care of our customers. And then the financials come third. And that is that wheel has really served us well. So you hire the right people, like we talked about earlier, and then put them in this culture in this environment where they can they have the autonomy to do right by the customer. And the customers keep coming back that has served us so well. We will weather this COVID storm will act we're actually going to be stronger. These the other airlines I 100% believe that. And it just allows us to create more growth for the future.

Right. Well, Jonathan sneaking Kim, Carl's question.

Definitely a great question here. wants to know, are you notifying all passengers on a flight? When you find out someone flew when they were positive?

Yes. So we as an industry, and this is back to some of the taskforce on Capitol Hill, there is not a good contact tracing solution. Especially when you think about the total volume of people that are contracting COVID. So we've mitigated it. So from transmission is next to nothing. But that level of contact tracing and then actually one of the big items, which all the technologists on this call is think about PII, so personal privacy data, everything going on with you, er, everything going on with California privacy that's going on across all these other states. So that's still being worked, but there is not a good contact tracing and kind of follow up and letting folks know after after the fact. But that is still on the agenda that is still being worked.

That's great. So Renee has just said, you know, on CNN they said that Southwest is the safest airline to fly in the with CNN reported on, so before we get to finding out, yeah, has won a round trip. What are some final things that you want to say to the tech community here, Dave? anything that we can do to continue to support? Obviously, it's to fly? Obviously, it's to support you. How can we relay any important information about emerging travel demands from the tech sector? Anything? This is your chance to ask us? Well, what

wonderful, thank you for that opportunity. As you heard me say earlier, we are bullish on on Pittsburgh, I was actually in market hosting a bunch of corporate customers back in November, just during the election, and I'm always, you know, blown away. I've jokingly said to many people over the years, whatever mental picture you have of certain cities across the country, Pittsburgh is number one where it's gonna blow away your expectations. And yeah, we love

that great ambassador,

I am from the Johns Hopkins. But yeah, we we continue to, we continue to strive to work hard to be your number one carrier and grow with Pittsburg all the exciting growth. Many of you are global, as Audrey just said, we have a lot of many of you may not be in charge of your travel programs. But we have all kinds of programs that make it easier for you to manage travel and all of your travelers and give you a lot of benefits and savings, loyalty incentives, but also discounts as well on your travels. That's another thing if you wanted to follow up with me through LinkedIn, or email, we'd love to get you in touch with our teams that support that. But maybe the biggest thing out there is just, you know, don't just believe me do the research, but it is truly safe to travel, the risk is low. Word of mouth is important. When we survey people before they travel, they're apprehensive. They're nervous, but after they travel, they see how safe and clean and how methodical the process is. And then they tell their friends and they travel again. So so many folks just need to experience at one time and then they'll be off and running. So Southwest is all about Pittsburgh and love to follow up with you at a later date to see how things progress,

you'll be great. We're gonna stay in close touch. But before we identify the winner, right before we do that, I want to give a plug for tomorrow show. We have Chuck Hoover, who is the general manager of Facebook reality labs here in Pittsburgh. And I've got to tell you, since having the opportunity to have an Oculus for a week I am my world has changed upside down inside out. We need to hold on fast for VR and AR and how it applies into our business, even your business, Dave, even South southwest. The kinds of opportunities that we have right at our fingertips right here is incredible. And Chuck is going to be joining us tomorrow. So now I'm going to pass the baton drumroll to Dave Harvey, he's going to tell us who has been selected

and I'll spill the beans here today is your lucky day. It's not just one we're gonna go ahead and give away number

for people. For people you're

hopefully you're still plugged in you must be present you

must be here. You must identify yourself and you must still be on the call.

You have to say something nice about Southwest number one la Gordon

la record

thinking about it. That Florida.

Le Gordon right right in the chat if you're still here.

You've door to

Brooks Renault number two.

Oh my god Brooks. Brooks. We got to show your face. We

got to see you. Give us a shout out.

Give us a shout out bro.

I'm trying I'm trying.

There you are. There you are.

We're proud companion pass member

Hey, there you go. And I see the fish on the back I that's definitely got Florida written all over it or maybe you need to connect and go down to Cabo and get one get another one of those big ones.

Yeah. Congratulations Brooke. Nice to see you.

Which these round trips are good anywhere we fly Hawaii.

Caribbean. Okay, who

else see Sherry voc

Sherry Okay, Sherry on the call still? If not, we're gonna have to go to someone else. She may have missed an opportunity.

Oh, number four.

She's coming in. She's coming in. And

there you go.

Where is she?

Last one goes.

I'm here. I'm sorry. I'm here.

Oh, there you are. You're going.

And last but certainly not least, Miss Lacey Milliron.

Oh, okay. And where is where? This is Lacey? I am here. All right. This one, Greg, thank you so much. Oh my gosh, Dave. Dave Harvey, you have kicked off the year for us. I can't thank you. We're gonna stay close to you. Thanks to everyone at Southwest for the work that they've been doing during this period of time and for the quarter ahead. And thank everyone for all the questions and Dave said reached out to him. His name is David. But he said only his mother calls him that. But if you go out to LinkedIn, it's David Harvey. So everyone, join us back here tomorrow. Happy New Year to all of you. Thank you, Dave, Dave Harvey, for being with us and taking the time. Stay safe. And thanks for all that you're doing with Southwest.

Thank you, Audrey. Here's to a prosperous 2021 green.

Absolutely. Thanks, everyone.

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