American low-cost carrier Southwest Airlines has released its 2023 second quarter (Q2) results. As an overall outlook for the quarter, operating revenues were at an all time quarterly record for the airline at $7 billion, a 4.6% increase from the previous year during the same year.
In addition, Southwest’s net income was $683 million, or $1.08 per diluted share and the airline had a liquidity of $13.2 billion, which is way above Southwest’s outstanding debt of $8 billion.
Bob Jordan, President and CEO of Southwest came out to say his thoughts on the successful second quarter as well as put out his projections for the rest of the year ahead.
“We are pleased to report a solid quarter amid continued strong demand. We generated all time record quarterly operating revenues, produced a very strong operational performance, and delivered healthy net income.”
He stated in his release that due to close in leisure travel demand, second quarter 2023 operating revenue per seat mile was pushed above the initial expectations showing very strong demand in this market.
Mr Jordan then went on to say that the airline still expects to achieve between a $1 billion and $1.5 billion pre tax profit for full year 2023.
Furthermore, the airline expects a similarly successful third quarter 2023 result as well as an overall year on year increase in profits for full year 2023.
Further topics covered
Adding to the CEO’s results review, Bob Jordan praised his wide team of staff saying, “I’m very proud of and grateful for, our amazing people and the great progress they have made towards our goals in the first half of the year”.
In addition, he said, “Our people delivered a very smooth and reliable operation in second quarter 2023, despite disruptive weather.”
“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% – our highest second quarter performance in the past years”.
Moving towards some of the accomplishments the airline has made so far this year, he highlighted the restoration of the majority of their network, and work towards a robust winter season schedule.
In addition, a new revenue management system was implemented and the addition of more staff to the workforce in order to fully utilise the fleet of aircraft Southwest currently possesses. This growth in staff benchmark is expected to be hit by the end of the third quarter.
Lastly, Jordan added that the airline is presently not at pre pandemic operating levels, but not far from it and that Southwest is continuing to work towards this goal in the most effective manner by optimising its current fleet of aircraft and analysing new possibilities in the market in order to achieve this.
Outlook for the rest of the year
With the third quarter now in full swing for the year, Southwest is pleased to report that based off the current booking and revenue trends the airline will indeed be having another successful quarter under their belt.
The company currently predicts that the revenue per available seat mile (RASM) will be a decline of 3 to 7% year on year. This is due to the challenging comparisons from the pent up travel demand seen in 2022 as well as higher than seasonally-normal growth.
Either way it seems Southwest is on course for a successful third quarter and full year 2023 as the carrier continues to build back its network from the pandemic.