US Airline Rescue Helps Southwest $ 116 Million Profit
DALLAS (AP) – Southwest Airlines is the first major U.S. airline to report profit since the pandemic began, as federal payroll assistance helped the company reach a net profit of $ 116 million in the first trimester.
Without the federal money, Southwest would have lost $ 1 billion in the quarter.
Southwest has also echoed its rivals in saying that travel demand continues to improve. The airline said Thursday that pleasure travel bookings in the United States have been improving every week since mid-February.
“While the pandemic is not over, we believe the worst is behind us, in terms of the severity of the negative impact on travel demand,” President and CEO Gary Kelly said in a statement.
The Southwest is benefiting more from the recovery in leisure travel as its biggest rivals – the Americans, Delta and United – rely more on business travel and long-haul international flights, both of which remain deeply depressed.
Kelly also expressed gratitude for the federal payroll assistance – the airline industry has received $ 64 billion in cash and low-interest loans over the past 13 months to help cover costs. labor costs.
Without Southwest’s share of this aid and other temporary items, Southwest would have lost $ 1.72 per share. This result was still slightly better than what Wall Street feared. The average estimate of 13 analysts polled by Zacks Investment Research was for a loss of $ 1.82 per share.
Southwest posted revenue of $ 2.05 billion, slightly higher than analysts’ forecast of $ 2.03 billion.
Shares of Dallas-based Southwest rose 2% in trading ahead of Thursday’s opening bell. As of Wednesday’s closing, stocks had more than doubled in the past 12 months and had gained 33% since the start of 2021, beating the 11% rise in the S&P 500 Index.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks inventory report on LUV at https://www.zacks.com/ap/LUV