A Southwest Airlines Co. Boeing 737 passenger jet pushes back from a gate at Midway International Airport (MDW) in Chicago, Illinois, U.S., on Monday, Oct. 11, 2021.
Luke Sharrett | Bloomberg | Getty Images
Southwest Airlines on Thursday joined other airlines in forecasting that strong travel demand will proceed but warned that delays in recent aircraft deliveries from Boeing could persist into 2024.
The airline reported a $277 million profit within the third quarter on record revenue of $6.22 billion, up nearly 33% from last 12 months, despite an $18 million impact from Hurricane Ian. Southwest’s shares were up 4% in premarket trading after releasing results.
Here’s how Southwest performed within the third quarter, compared with Wall Street expectations in keeping with Refinitiv consensus estimates:
- Adjusted earnings per share: 50 cents vs. an expected 42 cents.
- Total revenue: $6.22 billion vs. an expected $6.21 billion.
Airlines this month have forecast further strength in bookings through not less than the tip of the 12 months. Record revenues have helped carriers cover higher costs, a reversal for considered one of the hardest-hit sectors within the Covid-19 pandemic.
Southwest forecast a jump in revenue for the last three months of the 12 months of between 13% and 17%, compared with 2019 levels. It expects capability to be down about 2% from three years earlier.
The Dallas-based airline said it expects unit costs excluding oil to be down next 12 months compared with full-year 2022, but said that pilot shortages are limiting flying, which keeps costs up.
For the fourth quarter, it said unit costs could be up 14% to 18% from 2019.
Supply chain problems, labor shortages and training backlogs have hindered airplane manufacturers from ramping up production to fulfill the travel boom, capping airlines’ growth, an element that might keep airfares elevated.
Boeing’s CFO Brian West said on an earnings call Wednesday that the corporate expects to deliver about 375 of its best-selling 737 Max planes this 12 months, down from its January prediction of about 500 planes.
Southwest said it’ll likely increase capability 10% from 2022 in the course of the first quarter of 2023 and 14% within the second quarter.
The airline said “uncertainty across the timing of aircraft deliveries” is prompting it to stay cautious on its “2023 capability plan with a goal to have sufficient aircraft to operate our 2023 flight schedules, as originally published, in an effort to boost operational reliability.”