Business leaders make decisions. We set the organizational direction, plot the course. But decision-making today is more difficult by degrees. It’s become a day-to-day grind. Nothing seems to stand still long enough to get our footing, make plans and push off together toward the horizon.
Uncertainty is now native. That doesn’t mean it’s all turbulence in the sky ahead. Instead, it will be a mix of headwinds and tailwinds, which the airline industry has recently experienced in polar extremes.
Back in July 2020, Southwest Airlines CEO Gary Kelly took to a Texas Tribune webinar, telling its audience the airline saw traffic and revenue down 75 percent versus the prior year, and a total of 30 percent of its employees had separated from the company either permanently or temporarily.
“We’re still definitely losing cash every single day,” Kelly said on the webinar. “And working as hard as we can to figure out how we can stop that bleeding.”
Fast forward one year to July 2021, and Kelly, on a second-quarter earnings call, had a message with a very different tone. He was delighted at the turnaround in the business. Its revenue nearly doubled in the second quarter from first quarter levels, finally breaking from the previous four-quarter trend of billion-dollar losses. It was profitable in June, and he was bullish on the outlook for the rest of the quarter.
But when the airline submitted an August 2021 report to the SEC, things had changed. It expected that the recent negative effects of the pandemic on August and September revenue trends would make it difficult for it to be profitable in third quarter 2021.
Kelly, who has been with the airline for 35 years, had seen it through challenges that include 9/11 and the Great Recession. But of the pandemic, he said, “This is by far the worst.”
These wild swings aren’t expected to settle into the mean. EY, in a May report, speculated that the post-pandemic airline industry will see permanent, fundamental changes in nearly every aspect of its current existence.
“The path to recovery is dependent on a variety of factors,” the EY report stated, “many of which have their own timelines that are mostly uncertain.”
Leaders want to have the answers to every problem they encounter, but the dynamics of today’s market can make even day-to-day decisions difficult. Survival, then, for businesses in any industry, isn’t just a test of agility, but of resilience. Be patient, lean on your team, embrace unconventional solutions and get comfortable with discomfort — it’s going to be a long and bumpy ride.
Fred Koury is president and CEO of Smart Business Network Inc.