Southwest Airlines Co. has posted first-quarter earnings that exceeded expectations, which amounted to $ 435 million in the first three months of this year. Southwest Airlines Co. increased passenger capacity of up to 6%, but the flight distance increased by 7% in order to get a figure of 80.1% for the average flight. This result is entertainment in the middle of a dispute between Southwest Airlines Co. with Delta Air Lines over accommodation to the Delta to hold five times daily departures at Dallas Love Field.
Dallas-based Southwest, the nation’s fourth-biggest airline, said it earned 66 cents per share and the first quarter was the eighth straight quarter of record profit. Alaska Air Group Inc., parent of Alaska Airlines, and United Continental Holdings Inc., parent of United Airlines Inc., also reported records for first-quarter net income Thursday. Despite the strong showing in what is a seasonally weak quarter, carriers are contending with some stresses, ranging from the effect of the strong U.S. dollar on international bookings to competitive capacity additions and pricing pressure in some of their markets. We’ll be fully utilizing our 18 gates that we have worked really hard over a long period of time to get up and running, and obviously they’re very successful flights and customers are benefiting from more competition and lower fares.
For the April-through-June quarter, Southwest predicted that a key figure — revenue for every seat flown one mile — will decline by about 2 percent compared with the same period last year. In all, the three U.S. airlines that reported results on Thursday produced weak gains in unit revenue—a key metric that measures the amount of passenger revenue generated for each seat flown a mile—in the March quarter compared with a year ago. United then subleased the gates to Southwest, which agreed to let Delta continue operating its flights out of the gates until July 6, the end of the Delta-United deal. Department of Transportation’s general counsel wrote the city of Dallas in December to say that an airline that has been accommodated has to continue to be accommodated — i.e.
Analysts’ consensus is that Southwest will earn $2.4 billion this year, more than doubling its previous full-year record of $1.1 billion set in 2014. The company generated more than $1 billion in free cash flow and for the 12 months ended in March, delivered a 17.1% return on invested capital—both important indicators that its plans to get back on track are working. It also announced some tactical changes in its fleet plan designed to help it revamp its network without increasing capacity or its capital expenditures.