Southwest Airlines has announced a fourth quarter 2023 net loss of $219 million or ($0.37) per diluted share on a year-over-year increase in revenue of 10.5 percent to $6.8 billion. For the full year, the carrier reported a net profit of $498 million or $0.81 per diluted share.
On Thursday (January 25, 2024), Southwest Airlines reported their fourth quarter and full year financial results for the period ending December 31, 2023. The carrier reported a fourth quarter net loss of $219 million or ($0.37) per diluted share on a year-over-year increase in revenue of 10.5 percent to $6.8 billion. For the full year 2023, Southwest reported a net profit of $498 million or $0.81 per diluted share on an increase in revenue versus FY2022 of 9.6 percent to $26.1 billion. At December 31, 2023, Southwest had total liquidity of $12.5 billion, and total outstanding debt of $8.0 billion.
In Thursday’s announcement, Southwest Airlines’ President and Chief Executive Officer, Bob Jordan, said,
“2023 was a year of significant progress. We finished the year a much stronger Company thanks to the efforts of our incredible People. We completed a comprehensive winter action plan, restored our network, reached full utilization of our fleet, delivered significant new capabilities for our Customers, and had our best fourth quarter completion factor in more than a decade. And, importantly, we have maintained the strength of our investment grade balance sheet, despite the extraordinary challenges over the past few years. Our quarterly performance was at the better end of our expectations and included fourth quarter and full year records for operating revenues and passengers. We ratified five labor agreements in 2023, and with the successful ratification of an industry-leading contract for our Pilots, we have now ratified a total of nine agreements in just over a year, providing competitive market compensation packages to our outstanding People.
“I am very proud of our many accomplishments in 2023, but we have not yet delivered on our financial targets. As we work urgently to restore our profit margins to historical levels, we believe our 2024 plan provides a line of sight to improve our profitability year-over-year, earn our cost of capital this year, and provide significant progress towards our long-term goal to well exceed our cost of capital. Despite inflationary unit cost pressures from new labor agreements and a planned increase in aircraft maintenance, we plan to counter some of those cost pressures through strategic initiatives and already actioned network adjustments, creating operating margin3 expansion, excluding special items, in 2024. We also expect to make notable progress regaining efficiencies, with planned headcount at the end of 2024 flat to down year-over-year as we slow hiring to levels below attrition. We currently expect to grow our full year 2024 available seat miles roughly 6 percent, year-over-year, all of which is carryover from 2023 network restoration related growth. So, there is no net-new additional capacity in 2024. With the restoration of our network behind us, we plan to meter growth and continue to make adjustments, including capacity adjustments if needed, as we work vigorously to hit our financial targets.
“Our 2024 plan leverages a set of initiatives which, most importantly, includes better aligning the route network to new demand patterns. While it is early in the first quarter, these initiatives are delivering value and we expect them to contribute roughly $1.5 billion in incremental year-over-year pre-tax profits. As a result, we expect double-digit year-over-year operating revenue growth and year-over-year operating margin expansion. We expect our current initiatives to continue to deliver beyond 2024, and we are actively working on new initiatives. We will be relentless in executing against our plans to drive financial results while enhancing our great Hospitality and delivering a reliable and more efficient operation.”
Founded in 1971, Dallas-based Southwest Airlines (NYSE: LUV) has distinguished itself by offering exemplary customer service delivered by more than 71,000 team members at 121 airports across 11 countries. The airline carried over 126 million guests during 2022. Southwest offers a robust point-to-point network with a strong presence across leisure and business markets. During peak travel seasons, the airline operates more than 4,000 daily departures to 120 destinations across the U.S. and 10 additional countries. Southwest also continues to develop tangible steps toward achieving carbon neutrality by 2050, including offering Customers the opportunity to help the airline offset carbon emissions.
Source: Southwest Airlines