Southwest Airlines has reported a second quarter 2023 net profit of $683 million or $1.08 per diluted share on a 4.6 percent year-over-year revenue increase to $7.0 billion. At June 30, 2023, the carrier had total liquidity of $13.2 billion.
On Thursday (July 27, 2023), Southwest Airlines reported their second quarter financial results for the period ending June 30, 2023. The carrier reported a second quarter net profit of $683 million or $1.08 per share on a year-over-year increase in revenue of 4.6 percent to $7.0 billion. Southwest’s second quarter revenue per available seat mile (RASM) declined 8.3 percent compared to Q2 2022 to 16.53 cents, while cost per available seat mile (CASM) declined 1.7 percent to 14.66 cents. Costs excluding fuel and oil (CASM-ex) increased versus the same period last year by 7.9 percent to 11.37 cents. At June 30, 2023, Southwest had total liquidity of $13.2 billion, well in excess of outstanding debt totaling $8.0 billion.
In Thursday’s announcement, Southwest Airlines’ President and Chief Executive Officer, Bob Jordan, said,
"We are pleased to report a solid quarter amid continued strong demand. We generated all-time record quarterly operating revenues, produced a very strong operational performance, and delivered healthy net income. The resilient demand environment, especially for close-in leisure travel, drove second quarter 2023 operating revenue per available seat mile to the high end of our expectations. Further, we continue to expect $1.0 billion to $1.5 billion of pre-tax profit contribution in full year 2023 from strategic initiatives outlined at our Investor Day last December. Based on current revenue and cost trends, we expect record operating revenue and a profitable outlook again for third quarter 2023 and continue to expect year-over-year margin expansion for full year 2023.
“Our People delivered a very smooth and reliable operation in second quarter 2023, despite disruptive weather. We operated a record number of flights and carried a record number of Customers and bags, all while achieving a completion factor of more than 99 percent—our highest second quarter performance in the past 10 years. This solid operating performance has continued into July, where we have been able to minimize cancellations amid continued weather challenges throughout the network.
“I am very proud of, and grateful for, our amazing People and the great progress they made towards our goals in the first half of the year. To name only a few, we have largely restored our network, developed and are on-track with a robust winter operations plan, implemented a new revenue management system, and added necessary staffing to fully utilize our fleet, ahead of schedule, by the end of third quarter.
“Although our network is largely restored, it is not yet optimized. We are working to align our network, fleet plans, and staffing to better reflect the current business environment. While business revenues continue to recover, they are not back to pre-pandemic levels—therefore, we are revamping our 2024 flight schedules to reflect post-pandemic changes to Customer travel patterns. We estimate these meaningful network optimization efforts and the continued maturation of our development markets will contribute roughly $500 million in incremental year-over-year pre-tax profits in 2024, which we believe will support another year of margin expansion. As ever, we are committed to our goals of achieving industry-leading operational and financial performance, boosting our operational resilience, and widening our Customer Service advantage by enhancing our digital Hospitality.”
During the second quarter, Southwest took delivery of 21 Boing 737-8 MAX airplanes and retired 11 Boeing 737-700s, ending the quarter with 803 aircraft. The carrier plans to take delivery of approximately 70 Boeing 737-8s and to retire a total of 26 737-700s during 2023, ending the year with a fleet of 814 aircraft.
Founded in 1971, Dallas-based Southwest Airlines (NYSE: LUV) has distinguished itself by offering exemplary customer service delivered by nearly 70,000 team members at 121 airports across 11 countries. The airline carried over 126 million guests during 2022. 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 Morning (July 27, 2023), shares in Southwest Airlines Co. (NYSE: LUV) were down 8.85% to $33.05/share (10:45 AM EDT).
Source: Southwest Airlines