Southwest Airlines (LUV) Revenue Q1 2023
- Southwest Airlines lost $159 million in the first quarter as the financial impact of the holiday meltdown stretched well into 2023.
- The airline had canceled more than 16,000 flights in the last few days of December.
- It expects headwinds into the second quarter, but expects a profit.
A bird flies by in the foreground as a Southwest Airlines jet comes in for a landing at McCarran International Airport on May 25, 2020 in Las Vegas, Nevada.
Ethan Miller | Getty Images
Southwest Airlines lost $159 million in the first quarter as the financial impact of the holiday meltdown stretched well into 2023.
The airline had canceled more than 16,000 flights in the last few days of December when its staffing software could not keep up with scheduling changes during coast-to-coast storms. The incident resulted in a revenue impact of $325 million for the first quarter, Southwest said.
The company had warned of a loss for the quarter in January and said it recorded an increase in customer sales early this year.
Southwest shares fell more than 4% in premarket trading.
Here’s how Southwest performed in the first quarter, compared to Wall Street expectations according to Refinitiv consensus estimates:
- Adjusted loss per share: 27 cents against an expected loss of 23 cents.
- Total revenue: $5.71 billion against the expected 5.73 billion dollars.
Revenues of $5.71 billion represent a 21.6% increase from last year’s levels. Southwest’s net loss for the period of $159 million is also an improvement over the same period last year, when it lost $278 million.
But the Dallas-based carrier said it expects earnings headwinds into the second quarter. Still, it forecast a profit for the three months ending June 30.
Southwest said revenue per available seat mile, a measure of how much an airline generates for how much it flies, will decline 8% to as much as 10% in the second quarter from last year with capacity up 14%.
The airline said its sales outlook was impacted by about $300 million of “breakthrough revenue” due to a “higher-than-normal amount related to flight credits issued during the pandemic that were set to expire unused.” Southwest said it eliminated expiration dates on flight credits last summer.
The airline expects second-quarter costs, excluding fuel, to rise 5% to 8%, a cost outlook that includes wage accruals for labor contracts currently under negotiation, including for the pilots and flight attendants.
Southwest will hold a call with analysts to discuss results and the outlook at 12:30 PM ET on Thursday.
