Southwest Airlines faces staffing challenge as travel rebounds

A Southwest Airlines industrial plane approaches to land at John Wayne Airport in Santa Ana, California U.S. January 18, 2022. REUTERS/Mike Blake/File Photo

April 28 (Reuters) – Southwest Airways Co (LUV.N) on Thursday forecast a “strong” income for the present-day quarter and entire-year, but mentioned staffing woes were earning it more challenging to keep tempo with booming journey demand from customers.

The enterprise claimed a sharp recovery in vacation bookings in March assisted elevate its month to month earnings previously mentioned 2019 stages for the initial time due to the fact the onset of the COVID-19 pandemic and convert a earnings.

In April, as well, leisure bookings for spring and summer months travel remained “robust,” it reported. The Texas-primarily based carrier now expects an 8%-12% raise in income in the quarter by way of June compared with the corresponding interval in 2019.

Southwest’s shares were up about 2.1% at $46.90 in afternoon trade.

But the airline is grappling with staffing worries, which led to mass cancellations of flights past yr.

As a end result, it has trimmed programs to increase far more flights. Its capability for the duration of the quarter via June is projected to be down 7% from pre-pandemic concentrations.

The corporation expects to restore the vast majority of its network by the finish of 2023 and is aiming to include in excess of 10,000 new workers, which include 1,200 pilots this yr.

“We have designed trade-offs with lower potential in get to help operational dependability,” President Michael Van de Ven told investors on an earnings get in touch with.

Staffing woes have marred operations in current months at carriers these as Alaska Airways (ALK.N) and JetBlue (JBLU.O), forcing them to slice summer time schedules to stay clear of even more disruption.

Southwest claimed it is improved prepared to deal with the surge in visitors this year. It also downplayed the possibility of a slowdown in journey paying because of rising fares and significant inflation.

The firm expects shopper desire would continue to outpace provides. Southwest is the most current carrier to supply a bullish outlook.

American Airways Group (AAL.O), United Airlines (UAL.O), and Alaska Air Group Inc (ALK.N) last week mentioned their income in the current quarter would surpass pre-pandemic concentrations even as their capability stays below that of 2019. study additional

“Air travel demand is on the rise and pricing power has returned to the market, top to a potent profits outlook,” said Peter McNally, vice president and world-wide sector lead at research firm 3rd Bridge.

Southwest documented a broader-than-expected modified decline of 32 cents a share for the quarter by way of March.

Reporting by Kannaki Deka in Bengaluru Enhancing by Shounak Dasgupta, Arun Koyyur and Marguerita Choy

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