Stock Groups

Southwest Gains as It Sees Q4 Profit on Travel Boom, Higher Fares -Breaking


© Reuters.

By Dhirendra Tripathi

Investing.com – Southwest Airlines stock (NYSE:) rose 2.1% on Wednesday as the carrier said stronger travel demand and fares will bring it back to profitability in the current quarter, a sharp turnaround for a company that less than two months ago reported a loss for the third quarter and said the fourth would be no different.

The company said its “goal is to be solidly profitable in 2022, including all quarters”. The company said that incremental benefits from the new Chase cobrand agreement are also improving its bottom line.

In addition, revenue guidance was revised by the company for October and December. The current outlook is that operating revenues will fall 10% to 15% from the 2018 quarter. This pre-pandemic period. The prior guidance had called for a 15%- 25% erosion.

Southwest stated that leisure travel was in high demand for Thanksgiving. The U.S.-focused carrier stated that leisure travel bookings have been rising above expectation for December and that managed business revenue should recover to 55%-60% in December.

Omicron caused panic but most people continue to plan their trips, which is encouraged by government lockdowns. Travel, leisure and the airline industry were the most affected by the pandemic. With a few hundred million people now vaccinated, and a better understanding of the disease treatment, more people can travel.

Southwest slightly reduced its quarter-end fuel-cost forecast to less than $2.25/gallon from the previous range (2.25-2.35).

Prior to investor-day presentations, the airline had already published their forecast.

Disclaimer: Fusion MediaWe remind you that this site does not contain accurate or real-time data. CFDs include stocks, indexes and futures. Prices are provided not by the exchanges. Market makers provide them. Therefore, prices can be inaccurate and differ from actual market prices. These prices should not be used for trading. Fusion Media does not accept any liability for trade losses you may incur due to the use of these data.

Fusion MediaFusion Media or any other person involved in the website will not be held responsible for any loss or damage resulting from reliance on this information, including charts, buy/sell signals, and data. Trading the financial markets is one of most risky investment options. Please make sure you are fully aware about the costs and risks involved.

Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.