Southwest Airlines announced it made a profit in the third quarter, making it another North American airline continuing in the black.
Airlines worldwide have been suffering over the past two years due to the imposition of Covid pandemic restrictions. Now they have largely been lifted; these figures show the industry is starting to recover.
Southwest Airline’s Performance
While profit is positive, along with fellow North American airline Delta Airlines, Southwest is making less profit than in the previous quarter.
According to the latest figures provided by Southwest Airlines, in the three months up to September 30th, they reported a net income of $277 million US dollars.
The profit made by the airline this quarter is significantly less than that made in the previous quarter (the three months up to June 30th) of $4760 million US dollars, approximately 64% less profit when compared to the last quarter.
The drop in profit has been more severe for Southwest when comparing the airline with competitors.
Delta Airlines reported a profit reduction of 5.4%, drastically lower than the drop for Southwest at 64%. Delta Airlines has blamed the decline on the increase in costs.
Delta’s Chief Financial Officer, Dan Janki, said inflationary pressures and costs related to rebuilding the airline after the pandemic. Southwest has also blamed inflationary pressures.
In addition, the financial report from Southwest Airlines suggests that the fleet is not functioning optimally, implying that not all flights could garner many passengers. The airline is also dealing with the consequences of rising wages for its staff.
The Airline’s Revenue
To make matters worse for the carrier, revenue (total money received) appears to be less than that achieved in the previous quarter.
The income earned in the three months up to September 30th was $6.22 billion US dollars compared with $6.728 billion US dollars in the last quarter. This is approximately a 7.6% reduction in revenue, suggesting that Southwest Airlines may also be finding it harder to attract passengers.
On a more positive note, Southwest has gained awards for its service performance. They are ranked number one in Newsweek’s America’s Best Customer Service 2023 in the Low-Cost Airlines Category. They’ve also been named by Forbes as one of the Best Employers for Diversity in 2022 and awarded the Heritage Award by Texas Travel Alliance.
We have to wait to see how the airline fares in the final quarter to see if this trend continues.
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