DALLAS (CBSDFW.COM/AP) — Dallas-based Southwest Airlines says it has lost $10 million to $15 million so far from the partial government shutdown but reported a stronger fourth-quarter profit than analysts had expected.
According to the company, overall travel demand remains strong, which boosts the carrier’s outlook for first-quarter revenue.READ MORE: Secrets For Travelers During Surge In 'Revenge Travel'
The airline disclosed the shutdown impact Thursday as it reported a smaller fourth-quarter profit than a year earlier. Southwest shares rose in early trading.
The government shutdown is grounding some government and contractor travelers. It is also delaying approval of Southwest’s plan to begin flying from California to Hawaii, because Federal Aviation Administration regulators who must approve the service remain off the job.
“We are anxious for the government to resolve this shutdown,” Chairman and CEO Gary Kelly said in a statement.
Delta Air Lines said last week that the government shutdown that started Dec. 22 will cost it $25 million this month.
At Southwest, Kelly said, demand for tickets remains strong, including among corporate travelers. Southwest predicted that revenue for each seat flown one mile — investors watch that number closely as an indicator of demand and pricing power — will rise by between 4 percent and 5 percent in the first quarter if there is no further damage from the government shutdown.READ MORE: DFW Area Shouldn't Have Problems With Gas Supply Or Prices Following Ransomware Attack On Pipeline
That forecast is stronger than revenue guidance given last week by Delta and United Airlines.
Southwest said it earned $654 million in the fourth quarter, down 63 percent from $1.75 billion a year earlier.
The profit of $1.17 per share beat the average forecast of $1.06 from 12 analysts surveyed by Zacks Investment Research.
Revenue rose 8.5 percent to $5.7 billion, narrowly beating the analysts’ forecasts. Spending on jet fuel and labor costs both rose.
In trading before the opening bell, shares of Southwest Airlines Co. rose $1.90, or 3.7 percent, to $52.90.
The shares have climbed almost 10 percent since the beginning of the year, while the Standard & Poor’s 500 index has risen slightly more than 5 percent. The stock has decreased 22 percent in the last 12 months.MORE NEWS: CBS 11 Obtains Exclusive Photos Of Teen Migrants Detained At Dallas Convention Center
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