Southwest Airlines Reports Adjusted Third Quarter Net Loss of $135 Million on Revenue of $4.7 B
Southwest Airlines has reported and adjusted third quarter net loss of $135 million or ($0.23) per diluted share on operating revenues of $4.7 billion. When PSP3 benefits of $763 million are included, the airline reported a net income of $446 million or $0.73 per share.
On Thursday (October 21, 2021), Southwest Airlines reported their third quarter 2021 financial results for the period ending September 30, 2021. The carrier reported an adjusted third quarter net loss of $135 million or ($0.23) per diluted share on revenue of $4.7 billion. When special items are included, primarily $763 million received under the third extension of the U.S. Cares Act Payroll Support Program (PSP3), which was authorized under the American Rescue Plan Act of 2021, the company reported a third quarter net income of $446 million or $0.73 per diluted share. Southwest’s third quarter operating revenue declined year-over-two by 17 percent to $4.7 billion. At September 30, 2021, the airline had $17.0 billion in liquidity, well in excess of outstanding debt totaling $11.2 billion, including $16.0 billion in cash and short-term investments, and a fully available revolving secured credit facility of $1.0 billion.
In Thursday’s announcement, Southwest Airlines’ Chairman of the Board and Chief Executive officer, Gary C. Kelly, said,
“Third quarter 2021 was a challenge for us, operationally. Despite the deceleration of traffic in August and September due to surging COVID-19 cases, the third quarter 2021 demand and revenue performance was quite strong and a dramatic improvement from a year ago. That was a bright and encouraging sign of recovery, and I was especially pleased with July's revenue and profit performance. We were aggressive with our capacity plans for third quarter 2021, coming close to pre-pandemic third quarter 2019 available seat miles. Our active (versus inactive) and available staffing fell below plan and, along with other factors, caused us to miss our operational on-time performance targets, and that created additional cost headwinds. The net effect, including a revenue penalty of $300 million due to the COVID-19 surge