Southwest Expects to Be Profitable in Fourth Quarter on Stronger Travel Demand

By Reuters
December 8, 2021 Updated: December 8, 2021

Southwest Airlines said on Wednesday that it was expecting to be profitable in the fourth quarter on the back of stronger travel demand and fares.

It had previously forecast a loss for the quarter, citing mounting costs.

The Texas-based carrier, which has had to cancel flights en masse partly due to staff shortages, said it was aiming to be “solidly” profitable in all the quarters of 2022 by ensuring adequate staffing as well as restoring operational reliability.

Southwest’s upbeat outlook comes at a time when the airline industry is grappling with the uncertainty caused by the Omicron coronavirus variant. The flurry of new testing rules and border closings has raised concerns ahead of the important Christmas travel season.

The company said leisure bookings for December travel are exceeding its expectations. Business travel demand, however, remains depressed.

Still, it expects revenue in the quarter through December to recover to at least 90 percent of the 2019 levels. The company’s fuel bill is also projected to be lower than its previous estimate.