Southwest Airlines (LUV) - Get Report on Thursday posted a narrower-than-expected adjusted loss for the first quarter as air travel continued to recover amid ongoing vaccinations and the reopening of the U.S. economy.
The Dallas-based airline reported an adjusted loss of $1 billion, or $1.72 a share, vs. a loss of $77 million, or 15 cents a share, a year earlier. Analysts polled by FactSet had been expecting a loss of $1.85 a share.
Excluding $1.2 billion in federal payroll support assistance under the Consolidated Appropriations Act, 2021, the airline posted net income of $116 million, or 19 cents a share. First-quarter operating revenue was $2.05 billion, down 51.5% from a year earlier though above the $2.1 billion expected by Wall Street analysts.
“While the pandemic is not over, we believe the worst is behind us, in terms of the severity of the negative impact on travel demand,” CEO Gary Kelly said in a statement.
"Vaccinations are on the rise, and COVID-19 hospitalizations in the United States are down significantly from their peak in January 2021. As a result, we are experiencing steady weekly improvements in domestic leisure bookings, which began in mid-February 2021."
That was reflected in improved passenger revenue for the quarter, which came in at $1.71 billion. Freight-related revenue, meanwhile, was $43 million, the carrier said. The airline said it expects April's load factor to ring in between 75% and 80%, and operating revenue down 40% to 45% from 2019 levels.
For May, Southwest said it expects operating revenue to be down 35% to 40% from 2019 levels, even as passenger traffic and fares continue to show improvement. On that front, the airline said it expects a May load factor of 75% to 80%.
Southwest last month said that it has agreed to move forward with 100 firm orders for Boeing’s 737 MAX 7 in a sign of confidence for the troubled jet that was grounded for more than a year following two fatal crashes.
In November, the Federal Aviation Administration approved the 737 MAX to fly again. The first commercial trip using the re-certified MAX occurred at the end of December. Southwest operates one of the largest fleets of MAX jets.
At last check, shares of Southwest were up 2.06% at $63.32.