Southwest Airlines has posted the company’s first quarterly profit since the pandemic began, seeing 2021 end on a “high note” according to the carrier’s chairman.
In a press release on Thursday, the low-cost carrier reported a fourth quarter net income of US$68 million including special items, with a full year net income of US$977 million.
Gary C. Kelly, chairman of the board and chief executive officer said: “Leisure travel demand was strong, particularly during the holidays, and business revenues continued to recover compared with 2019 levels.
“While we continue to manage through an incredibly challenging operating environment, we made much progress in our recovery in 2021 and are well-positioned for future growth with our industry-leading balance sheet.”
Although the company saw a full year net loss of US$1.3 billion, it’s a major improvement from its US$3.1 billion loss in 2020.
Starting off the new year with the surge of the Omicron variant, however, plunged Southwest in a “challenging start to 2022” according to upcoming CEO Bob Jordan.
Jordan is set to begin his role as CEO on 1 February after the announcement in June last year.
He said the increase in cases and bad weather delayed the demand improvement Southwest previously expected, and now the Dallas-based company forecasts losses in January and February, eyeing a return of profitability in March.
“Based on our current plan, while we no longer expect to be profitable in first quarter, we expect to be profitable for the remaining three quarters of this year, and for full year 2022,” Jordan said.
Southwest was one of the last of the major American carriers to post its 2021 earnings.
American posted its fourth quarter earnings earlier this month, seeing a net loss of US$931 million, but a major improvement of revenue reporting only 17 per cent lower than 2019.
United Airlines was similar, reporting a net loss of US$0.6 billion in the fourth quarter but remaining steady in operating revenue.
The news comes as Southwest wagers whether to return alcohol to service, after over a year of it being banned due to unruly passenger numbers surging.
In early June, American and Southwest pledged to continue the suspension due to violent passengers towards crew members.
The airline was set to reintroduce alcohol next month but delayed it due to the Omicron variant.
In a quarterly call on Thursday, COO Mike Van de Ven said, “We’re looking at that here sometime late in the first quarter maybe early in the second quarter”.
Despite this, unions have urged airlines to avoid lifting the ban before the mask mandate is lifted – scheduled for 19 March – due to high numbers of unruly passengers over the federal requirement.
