Summary
- Southwest Airlines reports record Q2 operating revenue of $7 billion, driven by resilient demand within the leisure travel market.
- The airline achieves strong operational performance, setting records for flights, passengers, and bags within the second quarter.
- Southwest continues its fleet renewal program, receiving 21 recent Boeing 737 MAX 8 aircraft and retiring 11 older aircraft, ending Q2 with a complete of 803 aircraft.
US carrier Southwest Airlines today reported a net income of $683 million for the second quarter of 2023. Its quarterly operating revenue reached a record $7 billion, because the airline ended the quarter with strong operational performance.
A powerful second quarter
The airline attributed its record quarterly operating revenues to resilient demand, particularly for the close-in leisure travel market. Southwest expects this strong momentum to proceed into the yr’s second half, leading to a $1.0 billion to $1.5 billion pre-tax profit for your entire yr.
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Despite poor weather in several key markets, Southwest achieved a completion factor of greater than 99%, up significantly from the tip of last yr. The carrier set records by way of the variety of flights, passengers, and bags, leading to its highest second-quarter performance in a decade. Bob Jordan, President, and Chief Executive Officer, attributed this success to the corporate’s employees:
Photo: Denver International Airport
The airline’s Rapid Rewards frequent flyer program broke records for brand spanking new member additions, member engagement, and spending on Southwest’s co-branded bank card.
Growing the fleet
Southwest Airlines continued its fleet renewal program throughout the second quarter with the arrival of 21 Boeing 737 MAX 8 aircraft. It concurrently retired 11 of its 737-700 aircraft to finish the second quarter with 803 aircraft.
The airline still expects to receive roughly 70 MAX 8 aircraft deliveries from Boeing and retire one other 26 Boeing 737-700s by the tip of the yr. If all of the upcoming aircraft deliveries and retirements go as planned, the corporate will end the yr with 814 aircraft.
Photo: Denver International Airport
Southwest Airlines recently celebrated the delivery of its 800th aircraft.
Continued optimization underway
Second quarter 2023 operating expenses increased 12.1% year-over-year, to $6.2 billion, including barely higher than predicted fuel costs. Fuel efficiency, nonetheless, improved 3.3% year-over-year. This savings is especially on account of the more-efficient Boeing 737 MAX 8s growing its share inside the fleet.
Following record quarter auxiliary revenues, shareholders and investors benefitted as the corporate paid $214 million in dividends thus far this yr. Southeast also paid down its debt within the quarter, spending $8 million to retire scheduled lease payments. Airline CEO Jordan detailed how the network was recovering:
“Although our network is basically restored, it shouldn’t be yet optimized. We’re working to align our network, fleet plans, and staffing to raised reflect the present business environment.
“While business revenues proceed to recuperate, they usually are not back to pre-pandemic levels—due to this fact, we’re revamping our 2024 flight schedules to reflect post-pandemic changes to Customer travel patterns.”
Photo: John Gress Media Inc/Shutterstock
Southwest estimates its continued network optimization efforts and market development will contribute roughly $500 million in incremental year-over-year pre-tax profits in 2024,