Southwest Airlines reports smaller first-quarter loss, expects full-year profit
2022.04.28 14:32
FILE PHOTO: A Southwest Airlines commercial aircraft approaches to land at John Wayne Airport in Santa Ana, California U.S. January 18, 2022. REUTERS/Mike Blake/File Photo
(Reuters) – Southwest Airlines (NYSE:LUV) Co reported a smaller adjusted quarterly loss on Thursday and said it expects to be “solidly profitable” for the year as a rebound in travel helped it offset disruptions in January due to the Omicron coronavirus variant.
The company reported an adjusted loss of $191 million, or 32 cents per diluted share for the first quarter, compared with an adjusted loss of $1.0 billion, or $1.72 per diluted share a year earlier.
The airline canceled more than 5,600 flights in January and said 5,000 employees, or roughly 10% of its workforce, had contracted the coronavirus in the first three weeks of January.
“Our operational performance improved during February and March 2022 following acute staffing challenges experienced in January due to the Omicron variant,” Chief Executive Officer Bob Jordan said.
Texas-based Southwest Airlines said despite $430 million of headwinds, including about $380 million related to fall in bookings and flight cancellations, during the first quarter the airline is upbeat about the sharp rebound in revenue trends in March.
Major U.S. airlines last said their revenue in the current quarter would surpass pre-pandemic levels even as their capacity remains below that of 2019.
The surge in travel demand is also helping carriers deal with soaring fuel costs, which have more than doubled in the past year. U.S. airlines, which typically do not hedge against oil prices, have been hit by higher fuel costs due to the conflict in Ukraine.
However, Southwest Airlines said its multi-year fuel hedging program has helped it offset increases in jet fuel price in the first quarter of this year.
The airline’s operating revenue rose to $4.7 billion from $2.05 billion a year earlier. The company said it expected operating revenue for the year to increase between 8% and 12% compared with 2019.
