Southwest Airlines profit forecast for 2022: Bookings and fares exceed costs

Southwest Airlines reaffirmed its earnings guidance for the second quarter and 2022 as bookings and fares outpace the surge in labor, fuel and airport costs.

The Dallas-based airline expects second-quarter revenue growth of 8-12% from $5.9 billion in the same quarter in 2019, although it plans to fly 7% less than three years ago.

Southwest shares rose more than 2% in Thursday afternoon trading, outperforming other airlines and the broader market.

The earnings outlook echoed those of United Airlines, Delta Air Lines and American Airlines earlier this month and indicated strong demand for travel and a willingness on the part of consumers to pay for seats despite the sharpest spike in consumer prices since the early 1980s.

Throughout the year, Southwest said it is maintaining plans to fly 4% less than in 2019. Airlines compared results to 2019 to show progress in recovery from the Covid pandemic.

Carriers have been forced to cut capacity as staff shortages exacerbated last year’s flight cancellations and delays. JetBlue Airways, for example, on Tuesday said it was cutting its 2022 growth plan by as much as 5% from its previous expansion plan to 15%, sending the stock down.

Southwest posted a $278 million net loss in the first quarter, compared to a $116 million profit a year earlier on $4.7 billion in revenue as it battled a surge in Covid omicron infections.