Southwest Airlines (LUV) Q2 2024 Earnings | Wilnesh News

Southwest Airlines On Thursday, unit revenue was expected to likely fall in the third quarter as oversupply in the U.S. market forces airlines to discount fares during what is typically the most profitable period of the year.

Southwest Airlines said unit revenue this quarter could fall by up to 2% from last year and non-fuel costs could rise by up to 13%, with rising costs putting pressure on the airline through the end of 2024.

Here’s how Southwest’s second-quarter performance compared to Wall Street expectations, according to the London Stock Exchange Group’s (LSEG) consensus forecast:

• Earnings per share: Adjusted 58 cents compared with expectations of 51 cents
• income: $7.35 billion vs. $7.32 billion expected

Southwest Airlines said second-quarter revenue rose 4.5% from last year to a record $7.35 billion, but profits fell more than 46% to $367 million. Revenue per available seat mile, a measure of an airline’s pricing power, fell 3.8%, broadly in line with Southwest’s lowered forecast last month.

“Our second quarter results were impacted by external and internal factors and fell short of the goals we believed we had the ability to achieve,” Chief Executive Bob Jordan said in the earnings release.

After adjusting for one-time items, Southwest Airlines reported earnings of 58 cents per share, above analysts’ expectations.

The airline is undergoing an overhaul as investor pressure mounts to do more to boost revenue. Elliott Management last month disclosed a nearly $2 billion stake in the airline and called for a leadership change.

Earlier Thursday, Southwest Airlines announced it would cancel its open seating program and offer some seats with extra legroom on its Boeing aircraft and add overnight flights, a change it has made in more than five decades of flying. The biggest change in its business model. The changes, which will begin next year, will make Southwest more like its network carrier competitors.

“We are taking urgent yet prudent steps to mitigate near-term revenue challenges and implement long-term transformation initiatives designed to drive meaningful top and bottom line growth,” Jordan said.

Delta Airlines and United Airlines Executives said earlier this month they expected U.S. capacity to begin slowing next month, which could lead to higher fares.

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