Following its holiday service collapse, Southwest Airlines’ customers have finally started flying with them again, helping the airline Southwest posts record revenue first-quarter revenue.
The airline reported that robust March bookings helped the quarter’s revenue jump 22% to $5.7 billion. That was higher than the findings from the previous year, which were still impacted by the spike in Covid cases brought on by the Omicron strain, as well as the $5.1 billion it recorded for the same period of 2019—the year prior to the pandemic.
Due to the high demand, prices increased. During the quarter, customers paid 10% more per mile to fly on Southwest than they did a year prior and 12% more than they did during the same time period in 2019.
Southwest posts record revenue despite holiday meltdown
Service Issues
Not all the news was good: Southwest posts record revenue Airlines reported a first-quarter loss, as the carrier had forewarned would occur three months earlier, due to the lasting effects of significant service issues. The quarter’s revenue was reduced by $325 million as a result of weak bookings in January and February. Southwest reported a loss of $163 million, or 27 cents per share, after exceptional items; this was slightly worse than the analysts’ consensus loss estimate of 23 cents per share.
The airline also stated that it will have to reduce its capacity by 1% below its original forecast due to Boeing’s postponed 737 Max deliveries. It is also concerned about the possibility of a decline in demand brought on by macroeconomic problems.
Positive Outlook
Southwest (LUV) shares fell more than 5% in noon trade as a result of this warning and the larger-than-expected loss in the first quarter. Early on Thursday, American Airlines reported high demand and a record-breaking $12.2 billion in first-quarter revenue. That is an increase of 8% from the first three months of pre-pandemic 2019 and 37% from the same period last year. The cost for each mile flown on America increased by 21% over the previous year.
American met Wall Street expectations with a meager profit of $33 million after exceptional items because to the robust revenue. Despite the enormous losses experienced during the epidemic and the difficulties the overall economy is currently experiencing, American CEO Robert Isom stated the outlook is positive for the US airline industry.
