Southwest Airlines keeps 2022 profit forecast as bookings and fares outpace higher costs

Southwest Airlines reiterated its forecast for second-quarter and 2022 profits as bookings and fares outpace a jump in labor, fuel and airport costs.

The Dallas-based carrier expects second-quarter revenue growth of 8% to 12% over the $5.9 billion it brought in during the same quarter of 2019, even though it plans to fly 7% less than three years ago.

Southwest’s shares rose more than 3% in premarket trading.

The profit forecast echoes outlooks from United Airlines, Delta Air Lines and American Airlines earlier this month and points to strong travel demand and a willingness among consumers to pay up for seats despite the sharpest spike in consumer prices since the early 1980s.

For the full year, Southwest said it is maintaining plans to fly 4% less than in 2019. Airlines have compared results with 2019 to show progress in their pandemic recoveries.

Carriers have been forced to pull back capacity as staffing shortages exacerbated flight cancellations and delays over the past year. JetBlue Airways, for example, on Tuesday said it was slashing its growth plan for 2022 by as much as 5% from a previous plan to expand flying up to 15%, sending shares tumbling.

Southwest swung to a $278 million net loss for the first quarter, down from a $116 million profit a year earlier, on $4.7 billion in revenue as it struggled with a surge in omicron infections.