DALLAS (CBSDFW.COM/AP) — Southwest Airlines’ first quarter performance managed to beat Wall Street’s view, even as the airline said it came under pressure due to thousands of flight cancellations related to Boeing’s 737 Max 8.
The worldwide grounding of more than 350 Max 8 jets came about after two crashes that killed hundreds.
Chairman and CEO Gary Kelly said in a statement on Thursday that Southwest had more than 10,000 flight cancellations due to the grounding of the Boeing 737 Max 8 aircraft. “The flight cancellations in first quarter 2019, and the resulting lower available seat mile (ASM, or capacity) growth, year-over-year, created significant pressure on our first quarter unit costs,” he said.
According to Kelly, the Max 8 comprises less than 5% of Southwest’s daily flights, and that the “vast majority” of customers were not impacted by the Max 8 groundings — Southwest has 34 of the Max jets. He added that the airline has proactively adjusted its published flight schedules for the next several months and removed all MAX flights through August 5.
“Following a rescission of the Federal Aviation Administration order to ground the Max, we will return the aircraft to service once we are confident that we are in compliance with all necessary FAA directives and all necessary pilot training has been completed,” Kelly said. “Safety is our top priority, and that commitment will never be compromised.”
For the three months ended March 31, Southwest Airlines Co. earned $387 million, or 70 cents per share. That’s better than the 61 cents per share analysts surveyed by Zacks Investment Research were calling for.
Revenue for the Dallas-based company totaled $5.15 billion in the period. Analysts expected $5.14 billion.
Shares rose 3% in premarket trading.
(© Copyright 2019 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)