Southwest Expects Revenue to Rebound After Fatal Flight 1380

Jul 26, 2018

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Southwest Airlines expects to see booking levels to return back to normal rates as the carrier continues to recover from the fallout after one passenger died in an engine explosion in April.

“We are encouraged by the solid rebound in demand,” Southwest CEO Gary Kelly said in a statement Thursday.

The airline is predicting its revenue for available seat mile — the industry’s standard metric for profit — will increase up to 1% in the three-month period ending on September 30.

In the months following the fatal accident on Flight 1380, in which an engine fan blade broke off and caused an explosion, sending shrapnel through a passenger’s window and killing her, Southwest’s revenue per available seat mile rate dropped between 1%-3%. Following the deadly incident, Southwest had pulled its advertising, which also had an impact on its profits. The airline says its upcoming Q3 revenue per seat will be in a range of either 1% higher or 1% lower than the same timeframe for 2017.

So, the predicted rebound in bookings would just about return the low-cost carrier to the place it was before the accident in April. The airline said the accident will not have a material affect on this year’s Q4 trends.

The Dallas-based airline said the April 17 accident cost it about $100 million in lost profits.

H/T: Bloomberg

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