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Southwest says journey demand nonetheless robust, warns Boeing delays may proceed into 2024

A Southwest Airways Co. Boeing 737 passenger jet pushes again from a gate at Halfway Worldwide Airport (MDW) in Chicago, Illinois, U.S., on Monday, Oct. 11, 2021.

Luke Sharrett | Bloomberg | Getty Photographs

Southwest Airlines on Thursday joined different airways in forecasting that robust journey demand will proceed however warned that delays in new aircraft deliveries from Boeing may persist into 2024.

The airline reported a $277 million revenue for the third quarter on file income of $6.22 billion, up practically 33% from final 12 months, regardless of an $18 million influence from Hurricane Ian. Southwest’s shares have been up 4% in morning buying and selling after releasing outcomes.

Here is how Southwest carried out within the third quarter, in contrast with Wall Avenue expectations based on Refinitiv consensus estimates:

  • Adjusted earnings per share: 50 cents vs. an anticipated 42 cents.
  • Whole income: $6.22 billion vs. an anticipated $6.21 billion.

Airways this month have forecast additional energy in bookings by means of no less than the tip of the 12 months. Report revenues have helped carriers cowl increased prices, a reversal for one of many hardest-hit sectors in the Covid-19 pandemic.

Southwest forecast a bounce in income for the final three months of the 12 months of between 13% and 17%, in contrast with 2019 ranges. It expects capability to be down about 2% from three years earlier.

The Dallas-based airline mentioned it expects unit prices excluding oil to be down subsequent 12 months in contrast with full-year 2022, however mentioned that pilot shortages are limiting flying, which retains prices up.

Southwest CEO Bob Jordan informed CNBC’s “Squawk Field” that the airline would have the ability to enhance capability 5% to eight% if it had the pilots it wants.

For the fourth quarter, it mentioned unit prices could be up 14% to 18% from 2019.

Provide chain issues, labor shortages and coaching backlogs have hindered airplane producers from ramping up manufacturing to satisfy the journey growth, capping airways’ progress, an element that would maintain airfares elevated.

Boeing’s CFO, Brian West, mentioned on an earnings name Wednesday that the corporate expects to deliver about 375 of its bestselling 737 Max planes this 12 months, down from its January prediction of about 500 planes.

Southwest mentioned it’s going to possible enhance capability 10% from 2022 throughout the first quarter of 2023 and 14% within the second quarter.

The airline mentioned “uncertainty across the timing of plane deliveries” is prompting it to stay cautious on its “2023 capability plan with a aim to have ample plane to function our 2023 flight schedules, as initially revealed, in an effort to reinforce operational reliability.”

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