Southwest Airlines reiterated its forecast for second-quarter and 2022 profits as bookings and fares outpace a jump in labor, fuel and airport costs.
The Dallas-based carrier expects second-quarter revenue growth of 8% to 12% over the $5.9 billion it brought in through the same quarter of 2019, despite the fact that it plans to fly 7% lower than three years ago.
Southwest’s shares rose greater than 2% in afternoon trading Thursday, outpacing other airlines and the broader market.
The profit forecast echoes outlooks from United Airlines, Delta Air Lines and American Airlines earlier this month and points to strong travel demand and a willingness amongst consumers to pay up for seats despite the sharpest spike in consumer prices because the early Nineteen Eighties.
A Southwest Airlines jet lands at Midway International Airport on January 28, 2021 in Chicago, Illinois.
Scott Olson | Getty Images
For the complete yr, Southwest said it’s maintaining plans to fly 4% lower than in 2019. Airlines have compared results with 2019 to point out progress of their Covid pandemic recoveries.
Carriers have been forced to tug back capability as staffing shortages exacerbated flight cancellations and delays over the past yr. JetBlue Airways, for instance, on Tuesday said it was slashing its growth plan for 2022 by as much as 5% from a previous plan to expand flying as much as 15%, sending shares tumbling.
Southwest swung to a $278 million net loss for the primary quarter, down from a $116 million profit a yr earlier, on $4.7 billion in revenue because it struggled with a surge in Covid omicron infections.