Southwest Airlines is reporting a $683 million profit for the second quarter, and revenue is a quarterly record as planes are packed during the peak summer travel season.
Southwest CEO Robert Jordan sought to assure the market, saying that much of the decline in the revenue ratio is due to people traveling on vouchers and credits that Southwest extended during the pandemic. He said the airline is 70% booked for the third quarter — ahead of where it would normally be in late July.The average one-way fare on Southwest dropped nearly 3% compared with last summer, to $179.44.
The second-quarter results from Dallas-based Southwest, which were aided by lower fuel prices, beat analyst expectations. The company predicted record revenue and another profit in the third quarter, but warned of higher non-fuel costs. Southwest's profit fell from $760 million a year earlier. Excluding special items, earnings per share were $1.09, matching the mean forecast in a FactSet survey of analysts.
Southwest's labor costs rose 25.5% from a year earlier, an increase of more than $500 million, and the airline said third-quarter non-fuel costs would rise by 3.5% to 6.5% for each seat flown one mile, mostly in anticipation of higher wages.
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