Bottomline
DALLAS: Southwest Airlines lost $278 million in the first quarter but said Thursday that it expects to be profitable for the rest of the year because of surging demand for travel.
The upbeat forecast echoed similar predictions this month from other big U.S. airlines. They say that after being mostly cooped up for two years during the pandemic, Americans are busting out their credit cards to book flights.
It is not all clear skies for the airlines, however. They face rising jet fuel prices and a tight supply of employees, particularly pilots. Southwest said its workforce grew by 3,300 people in the quarter, and CEO Robert Jordan said the airline was still “intensely focused” on hiring and training workers heading into the peak summer travel season.
Southwest predicted that second-quarter revenue will be 8% to 12% higher than the same quarter in 2019 even though it will operate 7% less passenger-carrying capacity. That is possible because of rising prices.
Southwest’s average fare in the first quarter was $159, up 32% from a year ago and 5% higher than during the same period in 2019. Fares are likely to rise further, partly because more travelers are booking far in advance, when prices tend to be higher, and because airlines limit the number of seats they sell at the cheapest fares. (AP)
DALLAS: JetBlue Airways said that it lost $255 million in the first quarter, and widespread flight cancellations in April plus the need to hire and train more pilots will delay the company’s return to profitability.
New York-based JetBlue said it would further reduce its schedule this summer to limit delays and cancellations.
The company’s shares fell 11.4% to close at $11.57, barely above their 12-month low.
Like other airlines that have reported financial results this month, JetBlue said demand for tickets is strong and fares are rising — the average first-quarter fare was 31% higher than a year ago — as consumers continued to return to travel after two years of pandemic.
But JetBlue struggled in April, canceling 10% of its flights. The company blamed its problems on an increase in pilots leaving, bad weather in Florida and New York, airtraffic control delays and other factors.
The pilots’ union has heaped some of the blame on the airline’s chief of systems operations. A union official said the airline’s reputation has suffered as customers endure canceled flights and the airline mishandles pilot scheduling.
CEO Robin Hayes said JetBlue is a victim of a pilot shortage affecting the entire industry. (AP)
NEW YORK: Caterpillar’s first-quarter sales climbed on strong demand for construction equipment despite supply chain challenges that continue to plague businesses ranging from car and phone makers to grocery stores.
And the Deerfield, Illinois, manufacturer is not immune to surging inflation that has run up costs for both consumer and companies across the globe.
Costs and expenses jumped 13% from last year to $11.73 billion. The company said rising manufacturing expenses primarily reflected more expensive material and freight costs. The company’s operating profit margin was 13.7% for the first quarter of 2022, compared with 15.3% for the first quarter of 2021.
The company also noted slowing sales in China due to COVID-19 and weakening residential construction.
Shares of Caterpillar Inc. slid 5% Thursday.
Overall sales rose 14% to $13.59 billion, topping the $13.5 billion that analysts surveyed by Zacks Investment Research were looking for. Higher prices also fueled revenue numbers.
Construction industry sales increased 12%, propelled by increased prices, changes in dealer inventories and higher end-user demand for aftermarket parts. (AP)