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Southwest Airlines Reports Fourth Quarter Net Income of $68 Million, FY 2021 Net Income of $977 M

Southwest Airlines has reported a fourth quarter net income of $68 million or $0.11 per diluted share on a 151 percent year-over-year revenue increase to $5.1 billion. For the full year 2021, the carrier reported a net income of $977 million or $1.61 per diluted share.

Southwest Boeing 737-8 MAX - Courtesy Southwest Airlines

On Thursday (January 27, 2022), Southwest Airlines Co. (NYSE: LUV) reported their financial results for the fourth quarter and full year ending December 31, 2021. The carrier reported a fourth quarter net income of $68 million or $0.11 per diluted share on a year-over-year revenue increase of 151 percent to $5.1 billion. Excluding special items, Southwest’s Q4 net income was $85 million or $0.14 per share. F or the full year 2021, the airline reported a net income of $977 million or $1.61 per diluted share on a year-over-year revenue increase of 75 percent to $15.8 billion. When special items are excluded, Southwest reported a full year 2021 net loss of $1.3 billion or ($2.15) per diluted share. During 2021, the carrier received a total of $2.7 billion in benefits under extensions of the U.S. Treasury’s Payroll Support Program (PSP2 and PSP3). At December 31, 2021, Southwest Airlines had liquidity of $16.5 billion and outstanding debt totaling $10.7 billion.

In today’s announcement, Southwest Airlines’ Chairman and Chief Executive Officer, Gary C. Kelly said,

“We ended 2021 on a high note with our first quarterly profit, excluding special items, since fourth quarter 2019 before the COVID-19 pandemic began. Leisure travel demand was strong, particularly during the holidays, and business revenues continued to recover compared with 2019 levels. We also generated incremental revenue from our new co-brand credit card agreement secured in December 2021 with Chase Bank USA, N.A. Our fourth quarter 2021 cost performance was in line with expectations, which included hiring thousands of new Employees. While we continue to manage through an incredibly challenging operating environment, we made much progress in our recovery in 2021 and are well-positioned for future growth with our industry-leading balance sheet.

“We celebrated our 50th anniversary in 2021, opened 14 new airports, returned the Boeing 737 MAX (MAX) back into service, completed our launch of industry-standard corporate bookings through multiple Global Distribution System (GDS) platforms, and implemented a new maintenance record-keeping system—to name just a few major accomplishments despite the pandemic. Our Employees' resilience, teamwork, and care for Customers and one another has been a marvel to watch. Southwest was, once again, named to FORTUNE's 2021 list of the World's Most Admired Companies—a testament to our People—and I am pleased we were able to accrue $230 million of profit sharing in 2021 for their benefit.

“On February 1st, Bob Jordan will become the 6th CEO of Southwest. Since our announcement last June, Bob has been hard at work on the transition and is well-prepared to take on this important role. I have the utmost confidence in Bob, our Leadership Team, and the People of Southwest to lead the Company forward and execute a solid strategy. I am supremely honored and privileged to have served Southwest as CEO for 18 years, and I look forward to continuing to be a part of the Team as Executive Chairman.”

Southwest Airlines' Fourth Quarter and Full Year 2021 Financial Results - Courtesy Southwest Airlines

Southwest’s fourth quarter revenue of $5.1 billion was down year-over-two by 11.8 percent due to the impact of the pandemic. The airline’s Q4 revenue per available seat mile (RASM) was 13.77 cents, down 3.8 percent compared to the fourth quarter of 2019, on a load factor decline of 2.1 points. Fourth quarter costs per available seat mile (CASM) increased 4.6 percent year-over-two to 13.24 cents. Southwest’s full year 2021 operating revenue of $15.8 billion was down year-over-two by 29.6 percent, attributable to the ongoing impact of the pandemic. FY 2021 RASM declined 16.1 percent compared to FY 2019 to 11.96 cents on a load factor decrease of 5.0 points, while CASM declined year-over-year by 14.2 percent to 10.66 cents.

The company ended 2021 with a fleet of 728 Boeing 737s, including 69 737-8 MAX aircraft. During 2021, the company retired eight owned Boeing 737-700s and returned 10 leased -700s, while taking delivery of 28 Boeing 737-8 MAX aircraft. As of December 31, 2021, six of Southwest’s Boeing 737-700s remained in temporary storage. During Q4, the company exercised 22 737-7 options for delivery in 2023 and on January 1st, 2022, exercised another 12 options, including five 737-8s and seven 737-7s for delivery in 2023. Southwest’s order book with Boeing now stands at 406 firm MAX orders and 226 MAX options for years 2022-2031.

Dallas-based Southwest Airlines (NYSE: LUV) has distinguished itself by offering exemplary customer service delivered by over 56,000 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 101 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 (January 27, 2022), Shares in Southwest Airlines Co. (NYSE: LUV) were up 0.92% to $44.08/share (12:12 PM EST).

Source: Southwest Airlines


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