Southwest (LUV) earnings 3Q 2022

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

“While there’s noise regarding whether we are headed into a recession or not or whether we may even be in one now, we have not seen any noticeable impact on our booking and revenue trends,” CEO Bob Jordan mentioned on the corporate’s quarterly name.

The airline reported a $277 million revenue for the third quarter on file income of $6.22 billion, up almost 33% from final 12 months, regardless of an $18 million impression from Hurricane Ian. Southwest’s shares rose 2.7% on Thursday, whereas the broader market fell.

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

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

Airways this month have forecast additional power in bookings by at the least the tip of the 12 months. File revenues have helped carriers cowl increased prices, a reversal for one of many hardest-hit sectors in the Covid-19 pandemic.

Southwest forecast a leap 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 gas to be down subsequent 12 months in contrast with full-year 2022, however mentioned that pilot shortages are limiting flying, which retains prices up.

Jordan informed CNBC’s “Squawk Box” on Thursday 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 can 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 travel increase, capping airways’ development, an element that would hold 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 can possible enhance capability 10% from 2022 through the first quarter of 2023 and 14% within the second quarter.

The airline mentioned “uncertainty around the timing of aircraft deliveries” is prompting it to stay cautious on its “2023 capacity plan with a goal to have sufficient aircraft to operate our 2023 flight schedules, as originally published, in an effort to enhance operational reliability.”