Southwest Airlines reported an all-time record quarterly operating revenue of $7 billion for its second quarter this year. The news comes following a rough patch for the company as its previous revenue results reported a net loss of $159 million.
According to Southwest’s official statement, the second quarter brought a net income of $683 million for the company and it's expected that 2023 will contribute between $1.0 billion and $1.5 billion of pre-tax profit.
"Our People delivered a very smooth and reliable operation in the second quarter 2023, despite disruptive weather,” said Bob Jordan, Southwest Airlines' president and chief executive officer in an official statement. “We operated a record number of flights and carried a record number of customers and bags, all while achieving a completion factor of more than 99 percent—our highest second-quarter performance in the past 10 years. This solid operating performance has continued into July, where we have been able to minimize cancellations amid continued weather challenges throughout the network.”
The previous revenue report showed a net loss of over $150 million which the company attributed to last year’s operational meltdown that left 71% of all the airline’s passengers stranded in the middle of the holiday season on Dec. 26, 2022.
“As expected, we incurred a first-quarter 2023 net loss that resulted from the negative financial impact of approximately $380 million pre-tax, or $294 million after-tax, related to the December 2022 operational disruption,” said Jordan of the first quarter results, adding, “We remain confident in our low-cost, low-fare business model and our long-term strategy, which is supported by a robust set of strategic initiatives designed to drive significant financial value. I am very grateful for the tremendous efforts of our employees and their unwavering focus on delivering reliability and hospitality to our valued customers."
While the latest report seems promising and Southwest Airlines business revenues continue to recover, Jordan noted that they are not back to pre-pandemic levels yet and further network optimization is needed for the airline. According to Jordan, “We estimate these meaningful network optimization efforts and the continued maturation of our development markets will contribute roughly $500 million in incremental year-over-year pre-tax profits in 2024, which we believe will support another year of margin expansion.”