• Wed. Sep 21st, 2022

US and Southwest register profits as airline industry rebounds

American Airlines and Southwest Airlines reported profits for the three months ended September, reflecting the industry’s recovery despite the spread of the Delta variant of the coronavirus. But airlines aren’t quite out of the woods: both would have reported losses without federal pandemic help.

Still, financial results, released Thursday, show the industry is on the mend as travel resumes steadily and the United States and the Southwest have said they expect to do even better over the course. of the last three months of the year, driven by businesses, international markets and vacations. to travel.

“We have made good progress in our pandemic recovery in the third quarter of 2021, and I expect more in the fourth quarter,” Gary Kelly, managing director of Southwest, said in a statement. “I am very excited about the recovery in demand and our outlook for 2022.”

Southwest reported third-quarter profit of $ 446 million, with revenue of $ 4.7 billion. The Delta variant deprived the airline of estimated $ 300 million in revenue over the summer, but Southwest also suffered from operational issues, including a three-day period of delays and cancellations of widespread thefts in June that echoed this month.

“Available staffing fell short of plan and, along with other factors, caused us to miss our operational performance targets on time,” acknowledged Kelly. As a result, the airline has limited its plans for 2022 as it plans to hire 5,000 people before the end of this year. Mr Kelly said Southwest was more than halfway to this goal.

Ticket sales have started to improve in recent weeks, but the Delta variant and operational challenges will weigh on Southwest’s fourth quarter results. The airline said the virus cost it around $ 40 million this month, while a day of disrupted flights that ended last week will cost it $ 75 million. The remainder of the quarter looks strong, however, with holiday ticket sales trends in line with 2019.

American, which reported $ 169 million in profit bolstered by federal aid, also said it expects strong vacation demand, which the airline says will help it end the fourth quarter with around 80% more revenue and nearly 90% more seats sold than in the last three months of 2019.

American received nearly $ 1 billion in federal aid in the third quarter to help pay employee wages, while Southwest received $ 763 million.

Both airlines have said they are optimistic about the resumption of business travel and a rebound in international travel with the United States expected to ease travel restrictions early next month. Delta and United, who both recently posted earnings for the same quarter, have also expressed optimism for the months ahead, although rising fuel costs may weigh on those improvements.