Google profit

Southwest Airlines posts quarterly profit of $68 million

Southwest Airlines on Thursday reported a profit of $68 million for the last three months of last year as it struggled to weather setbacks caused by the Omicron variant of the coronavirus, which delayed the resumption of travel and is expected to lead to the airline to a loss in the first three months of this year.

Now, with the cases dropping, “the worst appears to be behind us,” Bob Jordan, executive vice president of Southwest, who will take over as chief executive next week, said in a statement.

The company reported quarterly profits early last year, but the fourth quarter was the first in two years in which Southwest turned a profit without government aid support. The airline received $2.7 billion in federal grants to help pay workers in 2021, helping it achieve an annual profit of $977 million.

Despite the quarterly profit, Omicron dealt a blow to Southwest and its peers late last year and into this one, as high rates of sick workers, coupled with bad weather, forced carriers to cancel tens of thousands of flights during the Christmas period. and New Year’s holidays.

Southwest was particularly hard hit, canceling thousands of flights, or about 9% of scheduled trips, in the two weeks beginning Dec. 25. Only one other US carrier has issued more cancellations: SkyWest Airlines, which operates regional flights for several other carriers.

The problems continued this month. Southwest said it canceled more than 5,600 flights in January, taking a $50 million toll on operating revenue for the month. Omicron also weighed on ticket sales and led to an increase in customer cancellations. The airline now expects to report a loss for the first three months of 2022.

“Despite our fourth quarter earnings, we had a rocky start to 2022 as we continue to recover from the pandemic,” Jordan said. He added that the airline had also reduced flight plans for the first half of the year to “provide an additional buffer to the operation”.

Still, Southwest expects first-quarter 2022 operating revenue to decline only about 10-15% from the same period in 2019. The airline also said it hopes to restore the major part of its route network and return to typical productivity levels by the end of it. next year.

Despite the challenges, Southwest hired about 5,000 people last year and plans to hire another 8,000 this year as travel continues to pick up. To stay competitive, the airline raised its minimum wage to $15 an hour on August 1. She is in talks with her unions for a further raise to $17.

Southwest was the only one of the nation’s largest airlines to report a profit for the final quarter of last year. Delta Air Lines lost more than $400 million, United Airlines nearly $650 million, and American Airlines more than $930 million. On Thursday, Alaska Airlines said it made a profit of $18 million for the quarter, while JetBlue Airways announced a loss of $129 million.