This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.
Just more than one week after a Southwest Airlines engine exploded, resulting in the death of one passenger, the carrier says that its bookings have decreased.
In the company’s first quarter profit report released on Thursday, Southwest said that its Revenue per Available Seat Mile (RASM), a factor in pricing power, is expected to decrease 1%-3% in the second quarter. This, as compared to the second quarter RASM of 2017, which totaled 14.27 cents.
“Approximately one to two points of this estimated decrease is attributable to recent softness in bookings following the Flight 1380 incident,” the statement said.
This predicted decrease in RASM for Southwest is in contrast to positive outlooks from competing carriers, which are predicting an increase of pricing-power of as much as 5%.
Although Southwest is predicting its pricing power to decrease, it also announced that it’s going to exercise its options for an additional 40 Boeing 737 MAX 8 aircraft, adding 10 additional firm orders in each year between 2019 and 2022. Southwest was the North American launch customer of the 737 MAX in October 2017.
Other than the predicted decrease in RASM, Southwest’s first quarter total operating revenue increased 1.9% year-over-year, to a first quarter record $4.9 billion. Southwest attributes the profit to record passenger revenues of $4.6 billion.
The aftermath of Flight 1380, the first fatality on board a Southwest Airlines flight, is expected to loom over the carrier. Not only is it predicting its pricing-power gauge to drop next quarter, but the carrier was forced with complying with an FAA directive to inspect all CFM56-7B engines that have operated more than 30,000 total cycles to undergo inspection within the next 20 days. Southwest said on Wednesday that it had successfully completed engine inspections on all 256 engines in its fleet that fell under that FAA directive. It did not comment on any findings.
LIMITED TIME OFFER. Aside from the 100,000 points welcome bonus (available until 8/8/18), Amex recently made huge improvements to the Business Platinum Card, including the fact that you will now earn 50% more points on purchases of $5,000 or more, earn 5x on flights and eligible hotels at Amextravel.com and cardholders will receive a $200 airline fee credit each year.
- Limited Time Offer: Earn up to 100,000 Membership Rewards® Points.
- Earn 50,000 Membership Rewards® points after you spend $10,000 & an extra 50,000 points after you spend an additional $15,000 all on qualifying purchases within your first 3 months of Card Membership. Offer ends 8/8/18.†
- Get 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com.
- Get 50% more Membership Rewards® points. That's 1.5 points per dollar, on each eligible purchase of $5,000 or more. You can get up to 1 million additional points per year.
- 35% Airline Bonus: Use Membership Rewards® Pay with Points for all or part of a flight with your selected qualifying airline, and you can get 35% of the points back, up to 500,000 bonus points per calendar year.
- You can also receive 35% points back on all First and Business class flights, with all airlines available through American Express Travel.
- You can enjoy access to The American Express Global Lounge Collection℠ offering access to the most lounges across the globe, when compared with other U.S. credit card offerings. As of 11/2017
- Terms Apply
- See Rates & Fees