Southwest Airlines has revealed that it generated a net income of $348 million for the second quarter of 2021. While not at pre-pandemic levels, it does represent a significant turnaround from the airline’s loss of $915 million during the second quarter in 2020. As part of this, the airline saw its operating revenue increase by 300% year on year.
Across the board, things seem to be on the up in the United States. Today alone, we’ve seen three of the country’s significant airlines reporting profits for the quarter. American Airlines said it had ended the quarter $19 million in profit, while Alaska Airlines reported a whopping $400 million.
Revenues remain down
Southwest Airlines has decided to compare its revenues with 2019, as it believes the impacts of the pandemic make 2020’s figures less relevant. This year the airline posted a total operating income of $4 billion for the quarter, compared to $1 billion last year. While that is a significant improvement year on year, it still sits at 42.2% below 2019’s figure.
Commenting on the figures, Southwest Airline’s outgoing CEO, Gary Kelly, said,
“Second quarter 2021 marked an important milestone in the pandemic recovery as leisure travel demand surged. We generated net income in June 2021, representing our first monthly profit… since the negative effects of the pandemic began in March 2020.
A deeper look at the numbers
A large portion of the airline’s increase revenue came from a considerable increase in passenger numbers. Q2 of 2020 was really the height of the pandemic as far as most airlines were concerned. The airline managed to carry 5.253 million revenue passengers that year. This year between April and June, the airline carried 26 million revenue passengers.
The massive increase in passengers allowed the airline to bump its load factor by 51.5% to 82.9%. The average fare paid by a passenger during the period sat at $136.46, which was around two dollars higher than the previous year.
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Southwest Airlines recorded a credit of $740 million related to the government’s payroll support scheme and voluntary employee programs. Without this, the airline would presumably have made an operating loss.
What’s happening with Southwest Airlines’ fleet?
Southwest Airlines ended the second quarter with 736 aircraft, all from the Boeing 737 family. Of these, 68 were for the 737 MAX, with seven MAX planes being delivered during the quarter. The company returned one aircraft to the lessor during the period, meaning the fleet increased slightly during the period. By the end of the year, Southwest Airlines wants to add one more MAX while returning one more -700.
Surprisingly, only around 5% of the airline’s aircraft remain in storage due to the pandemic. The airline revealed that these 39 Boeing 737-700 aircraft are expected to all return to service by the end of the year following the required maintenance checks.
What do you make of Southwest Airlines’ second-quarter results? Let us know what you think and why in the comments below!