Southwest Airlines is seeing “strong business demand,” said CEO Bob Jordan, and in March its managed business revenue was “nearly restored” to March 2019 levels, EVP and chief commercial officer Ryan Green said during a Thursday earnings call.
“I think [that] is a remarkable accomplishment, and I think industry-leading in terms of our ability to get there that quickly,” Jordan said.
Green agreed that it is “tremendous progress, and it feels like we’re very close to full corporate revenue recovery,” he said. “While the managed business recovery still isn’t consistent across traveler sector or size of accounts, we expect further sequential improvement in managed business revenues from first quarter to second quarter. How the demand comes in may be a bit choppy with more volumes further out in the booking curve.”
Further, Southwest has seen nine of its 10 best managed business booking days in the month of April, Jordan added.
Southwest Q1 Metrics
Southwest reported a first-quarter net loss of $159 million on passenger revenue of $5.1 billion, up 23.5 percent year over year, and total revenue of $5.7 billion, an increase of 21.6 percent from a year prior. The loss was driven by a $380 million pretax negative financial impact related to the December operational disruption, Jordan said.
The company also on April 18 had a “double firewall failure” that resulted in the airline ordering a temporary ground stop for a little more than an hour, but only 22 flights were canceled that day, and there was no material impact on operations the following day, Southwest chief operating officer Andrew Watterson said. On April 18, 75 percent of flights departed within an hour of scheduled times, and 95 percent within two hours. “While we don’t like those delays, this represents an admiral recovery by our people, all things considered,” Watterson added.
Southwest’s first-quarter capacity increased 10.7 percent year over year, and it anticipates second-quarter capacity to be up about 14 percent versus a year prior. Southwest, however, has lowered its full-year 2023 capacity outlook by one percentage point to an increase of 14 percent to 15 percent year over year, based on fewer Boeing aircraft being delivered than initially planned.
First-quarter average fuel costs were $3.19 per gallon. Southwest forecasts second-quarter fuel costs to be $2.45 to $2.55 per gallon, and full-year costs to be $2.60 to $2.70 per gallon.
The company also announced Thursday a new revenue management system from Amadeus.
Southwest Q4 performance