Southwest Airlines reported improving results from January and February.
Results improve in Q1, aided by federal program
Southwest Airlines, a key conduit for returning leisure and business travelers to Southern Nevada after the pandemic, on Thursday reported improving results from January and February, but executives say they are still a long way from normal operations.
The company would have lost more than $1 billion in the first quarter had it not been for a $1.2 billion offset of salaries, wages and benefits expenses from the federal government’s extended Payroll Support Program.
With the PSP contribution, Southwest reported net income of $116 million, 19 cents a share, on revenue of $2.052 billion for the quarter that ended March 31. That compares with a net loss of $94 million, 18 cents a share, on revenue of $4.234 billion for the first quarter of 2020, when the pandemic began
affecting air travel.
“We think the worst is finally behind us,” Southwest Chairman and CEO Gary Kelly said in an earnings call with investors Thursday morning. “The payroll support from the federal government has allowed Southwest to preserve its 50-year history without involuntary layoffs or furloughs, an achievement unprecedented in the U.S. airline industry.”
Southwest has not laid off employees thanks to a voluntary separation and extended leave program, and because of rising passenger demand and bookings, the company plans to increase flight activity in the summer.
Southwest is Mccarran International Airport’s busiest commercial air carrier, and the airport has projected an increasing number of Southwest aircraft seats coming to Las Vegas.
Mccarran has reported 1.5 million seats a month on planes bound for Las Vegas in April 2020. Today, Southwest provides 1.3 million seats. Mccarran’s projections are for 1.5 million seats in June, 1.7 million seats in July and 1.8 million seats in August.
In February, Mccarran reported that Southwest flew 532,582 passengers to Las Vegas, 56.8 percent fewer than in February 2020.
Systemwide, Southwest hopes to operate at least 96 percent of its available seat miles by June, although the route structure is different than it was six months ago.
The company is adding 17 new airport destinations, including Chicago’s O’hare International Airport, Sarasota Bradenton International Airport in Florida, Colorado Springs Municipal Airport, Savannah-hilton Head International Airport in South Carolina, Houston’s George Bush Intercontinental Airport, Bellingham, Washington International Airport, Eugene Airport in Oregon and Santa Barbara Airport in California.
Chief Operating Officer Mike Van de Ven told investors in the call that the new cities are performing better than managers had expected.
Among the new destinations coming up are Fresno Yosemite International Airport in California beginning Monday, Myrtle Beach International Airport on May 23 and Jackson-medgar Wiley Evers International Airport in Mississippi and Bozeman Yellowstone International Airport in Montana starting June 6.
Van de Ven said of the new cities that have started up, “there’s not a clunker in the bunch.”