Southwest Airlines shares fell nearly 9% Thursday after reporting lower unit revenue and greater expenditures in the second quarter
Southwest said its second-quarter unit revenue fell 8.3% due to a policy change this summer that removed expiration dates from Covid pandemic travel credits.
Based on capacity rising 12% from a year earlier, the carrier forecasts third-quarter unit revenue to fall 7%. It cited
“challenging comparisons from the pent-up travel demand surge in 2022, and higher than seasonally-normal growth.”
According to the latest inflation read, U.S. airfare has decreased since 2022, despite record airline income.
Southwest is “revamping” 2024 timetables to meet changing customer demand as business travel income 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 stated in an earnings announcement.
Jordan said the redesign could reduce capacity more than usual as demand rises. The airline will also minimize early and late departures
Southwest's second-quarter performance contrasted to Wall Street projections, citing Refinitiv consensus:
The three months ended June 30 saw record revenue of $7.04 billion, beating analyst projections and increasing 4.6% from previous year.