Southwest Airlines CEO says Hawaii demand is 'darn strong'

Travel demand may be rising for some "beach and nature-inspired" destinations even as airlines continue to pile up coronavirus-related losses.

In a call with investors Thursday, Southwest Airlines CEO Gary Kelly said that "Hawaii demand is actually pretty darn strong."

The comments, though, came on the same day that the major U.S. Carrier reported its first annual loss since 1972.

"It was a big one and with non-GAAP losses coming in at $3.5 billion," Kelly said,

However, the chief executive said the airline remains "very well prepared" to weather this storm and was encouraged by the various executive orders put in place in the Aloha State as well as its pre-travel testing program. The program allows travelers to come to the islands without quarantining for two weeks as long as they produce a negative coronavirus test beforehand.

"The precleared program that they've put in place now that several carriers are leveraging, it really does make the experience pretty straightforward," Kelly said. "And the demand for Hawaii is actually very, very solid. So we think there's a tremendous amount of opportunity there."

Kelly said the company is also seeing strength in Florida as well as throughout Texas, Colorado and Arizona.

However, California and Hawaii, in particular, "began the fourth quarter with encouraging momentum," he said, while still cautioning that "quarantine and stay-at-home orders will reverse some of that."

Overall, beach and nature-inspired destinations continue to outperform, he said.

Comparatively, some of the airline's larger markets in the Northeast and Midwest such as New York and Chicago, "are underperforming."

Southwest will focus on managing capacity, inventory, pricing, costs and operations, Kelly said.

"Those things that we control, we will manage and control well," he said.

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