Southwest Airlines reported a net loss of $278 million in the first three months of the year on Thursday, but echoed the optimism of other airlines over the coming months, saying it has already cut its workforce by 3,300 employees, or about 6 percent, this year. has expanded .
“While the impact of the Omicron variant in January and February disrupted our projected earnings recovery in the first quarter of 2022, we returned to strong profitability in March 2022 due to rising demand for travel,” said Bob Jordan, CEO of Southwest, in a statement.
Despite high fuel prices and declining demand for business travel, Mr. Jordan expects to be “solidly profitable” for the remainder of the year.
But the company may find it difficult to return to and exceed its 2019 headcount. More than 15 percent of Southwest employees have joined the airline since the fall, Mr Jordan said during a conversation with investors and analysts, noting that many are still learning and are not yet as productive as they could be. to be. The airline plans to add 10,000 employees this year, up from a forecast of 8,000 in January. Attracting and training new pilots is especially crucial, Jordan said.
“Now if you’re at ‘Where are you most limited?’ coming, they are definitely pilots,” he said. “And to some extent, it’s our flight instructors to train our pilots.”
In February, Southwest retrained all of its pilots who took extended leave during the pandemic, Jordan said. Now it is trying to replace the hundreds who have made buyouts, a process that is between half and two-thirds complete, he said.
The sector struggled in the first two months of the year with staff shortages and passenger cancellations caused by the Omicron variant of the coronavirus, but reported a substantial turnaround in March. In April, Southwest continued to see strong sales for leisure travel and improvements in business travel, a lucrative part of any airline’s business.
The airline reported receiving $4.7 billion in revenue in its first quarter, nearly 9 percent less than the same period in 2019. But Southwest said its second-quarter revenue would rise between 8 and 12 percent. The airline also said it expected capacity for the year to be about 4 percent below 2019 levels.
Like United Airlines, Delta Air Lines and other airlines, Southwest said it expected the price of jet fuel from April to June to be higher than in the first three months of the year, rising to just over $3 from $2. 30 a gallon. But unlike most other U.S. carriers, Southwest expects to benefit from a strategy to financially hedge against fuel spikes, saving an estimated 61 cents in costs in the second quarter. The airline said it expected the practice to save $1 billion this year.
The airline also plans to introduce its new fare class, Wanna Get Away Plus, in the second quarter.
