Southwest Airlines (NYSE: LUV) reservations have declined in the wake of a deadly mid-air engine failure aboard one of its flights, the company warned Thursday.
Shares were down $1.33, or 2.5%, to $52.50, mid-morning Thursday after Southwest forecast a decline in second-quarter revenue of 1% to 3%.
"Approximately one to two points of this estimated decrease is attributable to recent softness in bookings following the Flight 1380 accident," Southwest said.
The company is in the midst of a fan-blade inspection program that has lead to the cancellation of scores of flights.
A blade on one of the Boeing 737-700's engines broke off when the plane was above 30,000 feet, sending shrapnel flying and puncturing a window.
One passenger was partially sucked out of the opening and died. It was Southwest's first passenger fatality from an accident in its history and the first such fatality aboard a U.S. airline since 2009.
Said CEO Gary Kelly, "We continue to cooperate with the National Transportation Safety Board's thorough investigation to understand the cause of the accident. We will never compromise the Safety of our Customers and Employees. It is our highest priority—today and always."
Meantime, the carrier reported net income of $463 million, net margin of 9.4%, and record first quarter earnings per diluted share of $0.79
Operating income of $616 million and operating margin of 12.5%. Excluding special items, net income of $438 million, net margin of 8.9% and earnings per diluted share of $.75
