1/1/2024 0 Comments Call southwest airlines![]() It just goes to show the power of our business model and how well our people are managing through a very difficult environment. Now of course, this is based on our current outlook and barring any unforeseen material events such as another wave that would impact or temporarily slow our progress, but we see no signs of that at this point. We are currently forecasting a healthy profit for Q2 with solid operating margins. Despite higher-than-normal unit cost inflation and productivity drags from underutilizing our assets, we expect to be solidly profitable for Q2 through Q4 and for the full year 2022. We will have another meaningful fuel hedge gain in Q2, and we remain well protected with our fuel hedge portfolio in the second half of this year. Our revenue initiatives continue to roll out, and Andrew will cover our new fare product in more detail, and we look forward to launching that this quarter and getting another one of our revenue initiatives in place and producing value. Looking forward, we are very encouraged with the bookings and revenue trends we are experiencing for Q2, which indicate operating revenues will be fully restored to quarterly record levels on stronger leisure and business demand. In the first quarter, total operating revenues were 91% restored to 2019 levels despite Q1 managed business revenues being only 45% restored. So - but for the Omicron impact, we estimate that we would have been profitable for the first quarter. That was the first quarterly increase since the onset of the pandemic. While we reported a Q1 loss, we were solidly profitable in March, actually not too far off of March 2019's profit.Īnd while modest, I'm very pleased that first quarter unit revenues increased as compared to 2019. We anticipated travel demand would rebound in March, and we were pleasantly surprised at how quickly it bounced back and the extent to which demand and bookings surged. ![]() As expected, we incurred losses in January and February due to the negative impacts of the Omicron variant. Well, the first quarter was a tale of two really different environments.
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