Southwest Airlines Co. has recently released its 10-Q report, detailing its financial performance and operational highlights for the first quarter of 2024. The company operates as a passenger airline, with a fleet of 817 Boeing 737 aircraft serving 121 destinations across the United States and near-international markets, including Mexico, Jamaica, and the Bahamas. Southwest Airlines offers inflight entertainment, a loyalty program, and a suite of digital platforms to support customers' travel needs.
In the first quarter of 2024, Southwest Airlines reported operating revenues of $6.3 billion, a record for the first quarter, driven by strong demand and continued capacity growth. However, the company recorded a net loss of $231 million primarily due to higher salaries, wages, benefits expense, and maintenance materials and repairs expense. This was partly attributed to a wide-scale operational disruption caused by extreme winter weather in late December 2022, resulting in the cancellation of over 16,700 flights and a financial impact of approximately $380 million on a pre-tax basis in the first quarter of 2023.
The company's net loss for the first quarter of 2024 increased compared to the same period in 2023, primarily due to higher expenses and the financial impact of the operational disruption in late 2022. Southwest Airlines provided selected financial guidance for the second quarter and full year 2024, expecting challenges due to Boeing aircraft delivery delays and inflationary cost pressures. The company anticipates an all-time quarterly record for operating revenue in the second quarter of 2024 and expects full-year operating revenue growth approaching high-single digits.
To mitigate the impacts of Boeing aircraft delivery delays and maintain reliable flight schedules, the company intensified its network optimization efforts and made the decision to cease operations at certain airports. Additionally, Southwest Airlines is evaluating options to enhance its customer experience and implementing cost control initiatives, expecting to end 2024 with approximately 2,000 fewer employees compared to the end of 2023.
The company is also focused on sustainability and announced the launch of Southwest Airlines Renewable Ventures, LLC, a subsidiary dedicated to creating more opportunities to obtain sustainable aviation fuel. Southwest Airlines aims to replace 10% of its total jet fuel consumption with sustainable aviation fuel by 2030 and achieve net-zero carbon emissions by 2050.
In the first quarter of 2024, Southwest Airlines announced new customer experience enhancements, including a redesigned cabin and new seats, with the redesigned aircraft cabin interior expected to debut in early 2025. The company also updated its order book with Boeing in 2023 to modernize its fleet with less carbon-intensive aircraft and enable long-term growth plans.
The market has reacted to these announcements by moving the company's shares -0.8% to a price of $27.03. If you want to know more, read the company's complete 10-Q report here.
