Southwest Airlines has reported a first quarter 2024 net loss of $231 million or ($0.39) per diluted share on a year-over-year increase in revenue of 10.9 percent to a record $6.3 billion. At March 31, 2024, the carrier had total liquidity of $11.5 billion.
On Thursday (April 25, 2024), Southwest Airlines announced their first quarter financial results for the period ending March 31, 2024. The carrier reported a first quarter net loss to $231 million or ($0.39) on a 10.9 percent year-over-year increase in revenue to $6.3 billion, a company first quarter record. At March 31, 2024, Southwest had 11.5 billion in total liquidity, including cash, cash equivalents, and a fully available revolving credit line of $1.0 billion.
In Thursday’s announcement, Southwest Airlines’ President and CEO, Bob Jordan, said,
“While it is disappointing to incur a first quarter loss, we exited the quarter with healthy profits and margins in the month of March. We are focused on controlling what we can control and have already taken swift action to address our financial underperformance and adjust for revised aircraft delivery expectations. I want to thank our more than 74,000 Employees for their continued Warrior Spirit to maintain a reliable and resilient operation as we adapt to aircraft delivery constraints and adjust to slower than planned growth for this year and next.
“Our first quarter 2024 revenue performance, while shy of our prior aspirations, resulted in record first quarter operating revenues, record first quarter passengers carried, and a solid sequential improvement in nominal unit revenue when compared with seasonal norms. The sequential improvement was driven by an acceleration in managed business revenues as well as benefits from network adjustments, which started in earnest with the March schedule. While costs remain a headwind, we are realizing benefits from our ongoing cost reduction actions and remain focused on enhancing productivity and controlling discretionary spending. We also have certainty with labor rates, having ratified agreements with 11 of our labor groups in the past 18 months, including the agreement ratified yesterday for our Flight Attendants.
“Achieving our financial goals is an immediate imperative. The recent news from Boeing regarding further aircraft delivery delays presents significant challenges for both 2024 and 2025. We are reacting and re-planning quickly to mitigate the operational and financial impacts while maintaining dependable and reliable flight schedules for our Customers.
“To improve our financial performance, we have intensified our network optimization efforts to address underperforming markets. Consequently, we have made the difficult decision to close our operations at Bellingham International Airport, Cozumel International Airport, Houston's George Bush Intercontinental Airport, and Syracuse Hancock International Airport. I want to sincerely thank our Employees, the airports, and the communities for all their incredible support over the years.
“Additionally, we are evaluating options to enhance our Customer Experience as we study product preferences and expectations, including onboard seating and our cabin. And, we are implementing cost control initiatives, including limiting hiring and offering voluntary time off programs. We now expect to end 2024 with approximately 2,000 fewer Employees as compared with the end of 2023.
“We are focused on achieving our financial prosperity goals and creating value for our Shareholders, while we adjust to changes in our aircraft delivery plans, Customer travel patterns and preferences, higher fuel prices, and other cost pressures. We are excited and optimistic with a robust set of strategic initiatives that are well underway. They are comprehensive and aimed at enhancing the Customer Experience; delivering operational excellence; creating new and meaningful revenue opportunities; expanding margins; and achieving return on invested capital well above of our weighted average cost of capital. We look forward to sharing these plans at our Investor Day in September.”
Southwest’s first quarter revenue per available seat mile (RASM) declined versus Q1 2023 by 0.1 percent to 14.98 cents while cost per available seat mile (CASM) increased 1.1 percent to 15.91 cents. Costs excluding fuel (CASM-ex) increased year-over-year by 5.2 percent to 12.28 cents. The airline’s Q1 2024 CAPEX totaled $583 million, primarily driven by aircraft-related spending, as well as technology, facilities and investments in operations.
Southwest is ceasing operations at Bellingham International Airport, Cozumel International Airport, Houston’s George Bush Intercontinental Airport, and Syracuse Hancock International Airport on August 4, 2024, The company expects to end 2024 with approximately 2,000 less team members compared to year-end 2023. Southwest will also reduce capacity at Atlanta and Chicago O’Hare airports.
During the first quarter, Southwest took delivery of eight new Boeing 737-8 MAX jets, and retired three Boeing 737-700s, ending the period with a fleet of 819 aircraft. For 2024, the airline expects to take delivery of 20 737-8s, down from the previous expectation of 46. In order to support fleet flexibility for 2025, Southwest plans to retire 35 aircraft in 2024, including 31 737-700s and four 737-800s, down from plans to retire 49.
Founded in 1971, Dallas-based Southwest Airlines (NYSE: LUV) has distinguished itself by offering exemplary customer service delivered by nearly 75,000 team members at 121 airports across 11 countries. The airline carried over 137 million guests during 2023. Southwest offers a robust point-to-point network with a strong presence across leisure and business markets. During peak travel seasons, the airline operates more than 4,000 daily departures to 120 destinations across the U.S. and 10 additional countries. Southwest also continues to develop tangible steps toward achieving carbon neutrality by 2050, including offering Customers the opportunity to help the airline offset carbon emissions.
In trading Thursday afternoon (April 25, 2024), shares in Southwest Airlines (NYSE: LUV) were down 7.62% to $27.09/share (12:27 PM EDT).
Source: Southwest Airlines