Southwest Airlines Co (NYSE: LUV), on Thursday, disappointed both in terms of its quarterly results and future guidance. Shares are down 5.0% this morning.
CEO Jordan apologised to customers
The world’s largest low-cost air carrier had to cancel thousands of flights this holiday season as Invezz reported here, resulting in an $800 million hit. Apologising for the meltdown to customers this morning on CNBC’s “Squawk on the Street”, CEO Bob Jordan said:
My full focus is on taking care of our customers and employees and doing everything it takes to ensure that this doesn’t happen again. We’ve added a full scale look at our de-icing procedures, we’ve added extra crew scheduling staffing.
Despite the debacle, though, customers are keeping loyal to Southwest Airlines and bookings, both on the leisure and business front, are still strong, the Chief Executive added.
Southwest Airlines’ guidance for Q1
CEO Jordan agreed that there were spots of improvement that the air carrier is committedly working on but dubbed the recent narrative that Southwest Airlines isn’t investing enough in technology “incorrect”.
We had an absolute cascade of flight cancellations, that turned into a lot of aircraft routing and crew routings. It overwhelmed our technical, manual, and process ability. That the issue, not the software. We’ve actually got a fix with GE Digital.
Southwest Airlines plans on investing $1.30 billion in technology this year. Nonetheless, shareholders are agitated because the airline is forecasting a loss in its current financial quarter as well.
The airline stock is now down more than 10% versus its recent high.
Southwest Airlines Q4 earnings snapshot
- Swung to a $220 million net loss or 37 cents per share
- That compares to $68 million net income a year ago
- Adjusted per-share loss came in at 38 cents
- Revenue jumped about 22% YoY to $6.17 billion
- Consensus was 7 cents loss on $6.22 billion revenue
Load factor at 83.5% was also shy of Street estimates, as per the earnings press release. Wall Street still has a consensus “overweight” rating on Southwest Airlines.
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