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Travelers check in at a Southwest Airlines ticket counter during the busy Christmas holiday season at Orlando International Airport on December 28, 2022 in Orlando, Florida.
Paul Hennessy | Anadolu Agency | Getty Images
Southwest Airlines lost $220 million in the fourth quarter as the carrier’s holiday meltdown drove up expenses and cost it millions in revenue during what was expected to be the busiest travel period since before the pandemic.
It forecast a first-quarter loss on Thursday, citing current “revenue and cost trends,” while analysts had been anticipating a per-share profit of 19 cents for the current quarter, based on estimates compiled by Refinitiv.
The Dallas-based airline said booking trends look positive in March, however, and it forecast first-quarter revenue up 20% to 24% over last year with capacity up 10%. It also estimated fuel and other costs would be higher than it previously estimated.
Southwest’s fourth-quarter loss compares with a $68 million profit during the same period in 2021. Its record revenue of $6.17 billion was up more than 22% from a year earlier.
Here’s how Southwest performed in the fourth quarter, compared with Wall Street expectations according to Refinitiv consensus estimates:
- Adjusted loss per share: 38 cents vs an expected loss of 12 cents.
- Total revenue: $6.17 billion vs an expected $6.16 billion.
Southwest shares were down about 2% in premarket trading after reporting results.
The airline said the mass cancellations hit its pretax results by $800 million, in line with its estimate earlier this month of a hit between $725 million and $825 million.
Southwest canceled around 16,700 flights between Dec. 21 though Dec. 31 after severe winter weather swept through the U.S.
While rival airlines had largely recovered around Christmas after the winter weather, Southwest’s technology was unable to process all the flight changes and crews had to call the carrier to get rescheduled. The carrier decided to scrap most of its flights in the following days to reset its operation, CEO Bob Jordan said earlier this month.
The carrier has been processing tens of thousands of refunds and complex reimbursements for travelers who booked flights on other airlines to get to their destinations.
Southwest’s executives will hold a call with analysts and media at 12:30 ET. They are likely to face questions about any additional costs and political fallout from its missteps as well as an update on technology updates that aim to prevent another meltdown.
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