Southwest Airlines (NYSE:LUV) shares slid in early trading Thursday after the airline reported lower unit revenue and higher costs during the second quarter — and said the trends are likely to continue this quarter.
The Dallas-based airline’s second-quarter unit revenue dropped 8.3% from a year earlier, Southwest said, citing a policy change last summer that removed expiration dates from pandemic travel credits.
The carrier said it expects unit revenue to fall as much as 7% during the third quarter on capacity up 12% from a year earlier. It blamed “challenging comparisons from the pent-up travel demand surge in 2022, and higher than seasonally-normal growth.”
Airlines have enjoyed record revenue in recent months, but airfare in the U.S. has dropped from 2022, according to the latest inflation read.
Southwest said it is “revamping” 2024 schedules to reflect changing customer demand as business-travel revenue recovers but lags pre-pandemic levels.
“We are working to align our network, fleet plans, and staffing to better reflect the current business environment,” CEO Bob Jordan said in an earnings release.
Adjusted earnings per share proved to be $1.09 vs. an expected $1.10
Total revenue was $7.04 billion vs. an expected $6.98 billion
The airline’s net income fell to $683 million, or $1.08 a share, down 10%
LUV shares backpedaled $2.64, or 7.3%, to $33.62.
Related Stories
