Southwest Airlines Bookings down after Deadly acc >
Southwest Airlines says reservations are down since the deadly accident on one of its planes last week.
DALLAS — Southwest Airlines says reservations are down since the deadly accident on one of its planes last week.
The company said Thursday that it expects earnings per mile, which monitors average prices, will drop between 1 percent and 3 percent at the April-through-June quarter. It stated that roughly 2 percent points of the decrease is due to slower sales since the April 17 accident that killed a passenger.
Southwest, the busiest commercial air carrier operating at McCarran International Airport, revealed the weaker bookings as it reported a 22 percent boost in first-quarter profit, to $463 million. The results were in line with Wall Street expectations.
It was the very first accident-related death of a passenger at the airline’s 47-year history.
"It remains a somber time" in the airline, CEO Gary Kelly said in a statement. He replicated condolences to the family of the girl who died, pledged to cooperate with accident investigators, and stated Southwest "will not compromise" on safety.
The Dallas-based airline also announced that it intends to fly into four cities in Hawaii, not only Honolulu. This raises the stakes at a looming competition with Hawaiian Airlines and other carriers that fly into the islands from the West Coast.
Southwest has indicated it intends convenient connecting flights from Las Vegas through California into Hawaii and isn’t committing to nonstop flights from McCarran into the islands. Las Vegas, frequently known as Hawaii’s "eighth southwest phone numbers reservations island," sees significant visitors to and from Hawaii, not just due to recognized ties through Boyd Gaming’s downtown Las Vegas possessions but because the University of Hawaii plays at precisely the same football conference as UNLV.
Southwest also stated it will lease coveted takeoff and landing slots at LaGuardia Airport in New York and Washington Reagan National Airport from Airlines, permitting it to expand at two airports that are basically full.
Lower income taxation helped Southwest conquer cheaper average fares and higher fuel and labor costs from the January-through-March quarter. Taxes dropped 28 percent from a year ago, saving the airline $54 million.
Excluding items like fuel-hedging contracts, Southwest said it would have earned 75 cents per share, matching the prediction of analysts surveyed by Zacks Investment Research.
Revenue rose 2 percent to $4.94 billion. This has been a Southwest record for its first quarter, but it fell short of the $5.02 billion that analysts at the Zacks survey had expected.
Southwest boosted earnings despite a drop of nearly 5 percent in the typical one-time fare, to $146.33 — reflecting slightly shorter trips and competition on key routes. However, the airline transported 6 percent more passengers, along with the average flight was fuller — 81.5 percent of seats were sold, compared to 79.9 percent a year earlier.
Labor costs rose 5 percent and fuel prices grew 6 percent. But Southwest stated second-quarter cost increases would be modest, in spite of potential pay raises for mechanisms and exactly what it termed a preliminary estimate of expenses regarding the deadly accident. Southwest did not provide a figure for those.
Southwest shares have fallen 18 percent since the beginning of the calendar year, although the Standard & Poor’s 500 index has decreased marginally more than 1 percent. The stock has fallen approximately 6 percent in the last 12 months.
Southwest shares fell 53 cents, 1 percent, to $53.30 per share on trading roughly twice the average quantity and rebounded by 2 cents, less than one percent, to $53.32 per share in after-hours trading.
Review-Journal staff writer Richard N. Velotta contributed to this story.
Earnings $4.94 billion 4.85 billion 1.9percent
Net income $463 million $339 million 36.6%
Earnings per share 79 pennies 55 pennies 43.6%