Southwest Airlines reports Q1 losses while American reports profit
Dallas-based Southwest Airlines' winter scheduling meltdown cost the carrier $380 million in the first quarter of 2023, adding to the $800 million loss it reported for the fourth quarter of last year.
Driving the news: Southwest reported a net loss of $159 million in the first quarter during an earnings call Thursday.
- Meanwhile: Fort Worth-based American Airlines reported a first-quarter profit for the first time in four years, with net income of $10 million.
Why it matters: The airline industry is expecting a busy summer. While American appears to be rebounding from reduced travel during the pandemic, Southwest has continued to struggle with scheduling and Boeing aircraft delays.
Yes, but: Both airlines reported revenue increases compared with last year's first quarter.
- American on Thursday reported $12.2 billion in first-quarter revenue, a 37% increase year over year.
- Southwest reported $5.7 billion in the first quarter, a nearly 22% increase compared to the first quarter of 2022.
Of note: Both American and Southwest executives have said delays in aircraft deliveries from Boeing and Airbus are hindering growth.
- "When we don't receive a delivery on time, guess what? We're going out and having to cancel flights. That affects thousands of customers," American CEO Robert Isom told CNBC last week.
Details: Southwest is scaling back its hiring for the year. The airline now expects to receive just 70 new Boeing 737 Max planes instead of 90.
- Boeing reported this week that it plans to increase production of its 737 Max planes from 31 a month to 38 a month later this year.
What's next: American will make a profit-sharing payment to employees in May, the first time the airline has done so in three years. It estimates having about $211 million for profit sharing.
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