Southwest Airlines, the busiest commercial airline operating at Harry Reid International Airport, suffered a rare quarterly loss, the company reported Thursday.
But the company indicated it sees better days ahead, as it takes steps to bolster leisure and business travel, and add more pilots and other employees to its ranks.
The Dallas-based discount carrier, stung by crew shortages in recent months as a result of employees taking off work after contracting COVID-19, also said it plans to hire 1,200 pilots and 10,000 employees overall this year.
New Southwest CEO Bob Jordan, who took over for retired CEO Gary Kelly in February, said the airline has replaced around two-thirds of the 640 pilots who took early retirement in the early stages of the pandemic. Hiring pilots faster has been difficult for the airline because it also needs to hire 50-60 flight instructors as well.
To return the airline to better levels of customer service, Southwest intends to fly around 7 percent less capacity in the second quarter compared with the same period in 2019. It also is taking delivery of 114 new aircraft this year. The combination of fare increases and less flying is expected to improve Southwest’s financial fortunes in 2022.
The airline reported a net loss of $278 million, 47 cents a share, on revenue of $4.694 billion for the quarter that ended March 31. In the same period a year earlier, Southwest reported net income of $116 million, 19 cents a share, on revenue of $2.052 billion.
Effects of the omicron variant of COVID-19 and flight delays exacerbated by bad weather and crew shortages hurt January and February results, but leisure travel demand rebounded in March, company executives said.
“While the impact from the omicron variant in January and February disrupted our anticipated profit recovery in first quarter 2022, we returned to strong profitability in March 2022 on surging travel demand,” Jordan said.
“Our operational performance improved during February and March 2022 following acute staffing challenges experienced in January due to the omicron variant,” Jordan said. “We have made great progress against our hiring plans for this year, increasing our headcount by approximately 3,300 in first quarter 2022, alone, net of attrition.”
Jordan said business travel for Southwest also surpassed 2019 levels in March for the first time since the pandemic began.
To further boost business travel, the company plans to increase frequencies on shorter business routes.
The airline also is on the verge of providing a new fare tier — Wanna Get Away Plus — on its website. Customers would pay extra for new benefits, including the ability to transfer flight credits to another person for future use, more flexibility in changing confirmed same-day flights and standby travel and greater earning power with its frequent-flier Rapid Rewards points.
Southwest flew 3.76 million passengers to and from Las Vegas in the first quarter of 2022, a 94.6 percent increase over the first quarter of 2021. The company has 2.1 million seats a month flying into the Las Vegas market. It has 226 departures a day to and from 66 airports, using 21 gates at Reid International Airport.
Southwest shares, traded on the New York Stock Exchange, increased 96 cents a share, 2.1 percent, to $46.90 a share in trading a little above the daily average. After hours, shares fell 23 cents, 0.5 percent, to end at $46.67 a share.
First-quarter revenue and earnings for Dallas-based Southwest Airlines Co., the busiest commercial air carrier at Reid International Airport. (NYSE: LUV)
1Q 2022: $4.694 billion
1Q 2021: $2.052 billion
1Q 2022: ($278 million)
1Q 2021: $116 million
Earnings/(Loss) per share
1Q 2022: ($0.47)
1Q 2021: $0.19