Southwest Airlines has posted record results over the last quarter as the carrier benefits from a surge in travel demand. The airline broke its all-time quarterly revenue and profit record and anticipates a strong third quarter to follow. We take a closer look at Southwest’s second-quarter results below.
Southwest breaks quarterly profit record
In its quarterly results released today, Southwest Airlines revealed an excellent second quarter which saw the low-cost carrier exceed its quarterly profit record.
Bob Jordan, Chief Executive Officer at Southwest, stated,
“We are very pleased to report all-time record quarterly revenues and net income, excluding special items, representing a significant milestone in our pandemic recovery. Travel demand surged in second quarter, and thus far, strong demand trends continue in the third quarter of 2022. “
Southwest noted that its strong results were “primarily due to a surge in leisure demand, especially in June, which resulted in strong passenger bookings, yields, and load factors.”
Southwest benefited from a boom in demand for leisure travel this summer. Photo: Vincenzo Pace I Simple Flying
The carrier posted a record quarterly net income, excluding special items, of $ 825 million. Southwest’s liquidity stands at $ 17.4 billion, well over its $ 10.5 billion outstanding debts.
Revenue higher than pre-pandemic
Southwest Airlines’ second quarter operating revenues reached an all-time record of $ 6.7 billion, up 13.9% compared to the same period in 2019.
Operating revenues per available seat mile (RASM) were up by 22%, fueled by an 18.4% passenger yield and 0.7% load factor increase.
Southwest will take delivery of 66 new aircraft this year. Photo: Getty Images
The airline has done well to maintain a completion factor of over 99% of its flights despite severe disruption afflicting the global travel industry. Additionally, its loyalty program revenue also hit a quarterly record.
Another strong quarter coming
Southwest remains optimistic about its performance over the rest of 2022 despite some operational challenges ahead. The airline has beena protected from soaring fuel costs after hedging fuel prices and expects to post a profit for the next two quarters.
Bob Jordan said,
“As anticipated, we experienced inflationary pressures and headwinds from operating at suboptimal productivity levels in second quarter, which we expect will continue in second half 2022; however, our fuel hedge continues to provide significant protection against higher jet fuel prices. Barring significant unforeseen events and based on current trends, we expect to be solidly profitable for the remaining two quarters of this year, and for full year 2022. “
The airline will bolster its fleet in the coming months with the addition of 23 Boeing 737 MAX 8 aircraft, set to replace 12 retiring Boeing 737-700s. With another 31 MAX 8 jets coming by the end of the fourth quarter, Southwest expects to end the year with 765 aircraft in its fleet.
Are you happy to see Southwest Airlines posting record profits? Have you flown much with Southwest this year? Let us know in the comments.