Southwest reports $159 million 1Q loss on meltdown effects
DALLAS (AP) — Southwest Airlines lost $159 million in the first quarter as it felt aftershocks from the December meltdown that caused thousands of canceled flights.
The airline said Thursday, however, that it made money in March and expects to be solidly profitable in the April-through-June quarter that includes the start of the peak summer travel season.
Southwest had already indicated it would lose money in the first quarter. The loss was narrower than Southwest’s $278 million loss a year earlier. After one-time items, it worked out to 27 cents per share, matching the expectation of analysts surveyed by FactSet.
Revenue rose 22% to a first-quarter record of $5.71 billion, slightly less than analysts expected.
The Dallas-based airline said the winter breakdown cost $380 million in the quarter from lost bookings and extra expenses. Southwest failed to bounce back after a winter storm just before Christmas, and its problems were compounded when its crew-rescheduling system broke down, leading to 16,700 canceled flights in a 10-day stretch.
Airlines are looking ahead to this summer. Strong travel demand and a limited supply of flights are keeping average fares high, which will boost airline revenue. But the carriers are facing higher costs for labor and fuel, plus the possibility of a recession that could hurt ticket sales.