Southwest Airlines has reported a first quarter 2022 net loss of $278 million or ($0.47) per diluted share on a year-over-three decline in revenue of 8.8 percent to $4.7 billion. At March 31, 2022, the carrier had total liquidity of $16.7 billion.
On Thursday (April 28, 2022), Southwest Airlines reported their first quarter financial results for the period ending March 31, 2022. The carrier reported a first quarter net loss of $278 million or ($0.47) per diluted share on an 8.8 percent year-over-three decline in revenue to $4.7 billion. At March 31, 2022, Southwest had liquidity of $16.7 billion including 15.7 billion in cash and cash equivalents and a fully available revolving credit line of $1.0 billion. The carrier closed the quarter with total outstanding debt of $10.7 billion. Southwest’s first quarter revenue per available seat mile (RASM) increased 0.4 percent compared to Q1 2019 to 13.65 cents, while the airline’s cost per available seat mile (CASM) increased year-over-three by 14.9 percent to 14.09 cents. The company’s costs, excluding fuel and profit-sharing (CASM-ex) increased 18.3 percent versus the same period in 2019 to 11.06 cents.
In Thursday’s announcment, Southwest Airlines’ Chief Executive Officer, Bob Jordan, said,
“While the impact from the Omicron variant in January and February disrupted our anticipated profit recovery in first quarter 2022, we returned to strong profitability in March 2022 on surging travel demand. First quarter 2022 operating revenues per available seat mile (RASM, or unit revenues) increased slightly compared with first quarter 2019, representing our first quarterly RASM increase relative to respective 2019 levels since the pandemic began. Our operational performance improved during February and March 2022 following acute staffing challenges experienced in January due to the Omicron variant. We have made great progress against our hiring plans for this year, increasing our headcount by approximately 3,300 in first quarter 2022, alone, net of attrition. We remain intensely focused on our hiring and training efforts as we work diligently to restore our network and position the Company for future growth. While we are experiencing inflationary pressure from higher jet fuel prices, our fuel hedge is providing significant protection against rising oil prices.
“Based on current plans and expected continued strong bookings, we continue to expect to be solidly profitable for the remaining three quarters of this year, and for full year 2022. Barring any unforeseen events and based on current trends, and despite higher fuel prices and managed business revenues and available seat miles (ASMs, or capacity) remaining below pre-pandemic levels, we expect solid second quarter 2022 profits and operating margins, excluding special items.
“As we focus on the basics, our priorities for 2022 are clear: getting properly staffed and returning to historic operational reliability; restoring our Customer Service advantage; growing our fleet with The Boeing Company's (Boeing) most-modern, fuel-efficient 737 aircraft; adding flights and restoring our network, especially on shorter-haul business routes; investing in enabling technologies for enhanced efficiencies; and producing consistent quarterly profits. Among our primary goals is to return to pre-pandemic levels of productivity as we plan to restore the majority of our route network and better optimize our operations by the end of next year. I am grateful to our People for continuing to demonstrate their resilience and superb Teamwork after more than two years of managing through the pandemic. While it has been an incredibly challenging period, we are greatly encouraged by the progress we are making and believe we are well-positioned for future growth and long-term success with our point-to-point network, low cost and low fare business model, industry-leading balance sheet, and the best Employees and Leadership Team in the industry.”
Southwest Airlines ended the first quarter with a fleet of 722 Boeing 737s. During the quarter, the airline retired five owned 737-700s and returned one leased 737-700. As of March 31, 2022, four of the carrier’s 737-700s remain in storage, and the company expects to retire a total of 28 of the aircraft type in 2022. Southwest also exercised options for 15 Boeing 737-8 MAX aircraft during the first quarter for delivery in 2022, as well as options for 12 Boeing 737-7 MAXs for delivery in 2023.
In April, due to the current certification status of the 737-7, Southwest converted 40 2022 firm orders into eight firm 737-8 2022 orders, moved one 737-7 order to 2023, and accelerated one 2023 737-8 option to 2022. During April, Southwest also exercised 16 Boeing 737-8 options for delivery in 2022 and two 737-7 options for delivery in 2023. Additionally, the company exercised and accelerated 10 2023 737-8 options into 2022, and shifted 10 2022 MAX firm orders (reflected as 737-7s in the company’s orderbook) to 2023.
Celebrating over 50 years of service, Dallas-based Southwest Airlines (NYSE: LUV) has distinguished itself by offering exemplary customer service delivered by over 55,000 team members. Southwest offers a robust point-to-point network with a strong presence across leisure and business markets. In 2019, the carrier served 130 million passengers. During peak travel seasons, the airline operates more than 4,000 daily departures to over 100 destinations across the U.S. and 10 additional countries. According to the U.S. Department of Transportation, based on the number of originating passengers boarded, Southwest has been the largest U.S. domestic carrier since 2003.
In trading Thursday afternoon (April 28, 2022), shares in Southwest Airlines Co. (NYSE: LUV) were up 2.22% to $46.96/share (3:28 PM EDT)
Source: Southwest Airlines
Comments