Southwest’s Revenue Is Struggling After Fatal Flight 1380

Jun 4, 2018

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After Southwest’s first passenger fatality, which occurred after a piece of engine shrapnel pierced a passenger’s window on flight 1380 from New York LaGuardia (LGA) to Dallas Love Field (DAL) back in April, the carrier has been bracing for revenue drops.

Originally it predicted a 1% to 3% drop in revenue for each seat it flies per mile. Now, Southwest is estimating the decreased revenue to register on the higher end of the spectrum, at about 3% decrease per available seat mile, the low-cost carrier said Monday.

The negative affect on the airline’s bottomline can be most directly attributed to the airline’s shift in marketing following the incident. Out of respect for the victims, Southwest decided to intentionally stop marketing and change its branding temporarily to a more somber tone – a noticeable difference for the typically cheerful presentation of the carrier.

Southwest had previously predicted 5% growth this year, but now it’s seeing closer to 4% growth due to the incident in conjunction with the overall trends of the industry and increased fuel prices.

As for its performance on Wall Street, shares of Southwest are down 22% so far for the year, while the NYSE Arca Airline index is only down about 10%, according to CNBC.

The deadly incident on flight 1380 unfolded when an engine fan blade broke off of the Boeing 737, striking a window, shifting cabin pressure and sucking a passenger partially outside the aircraft. That passenger, 43-year-old Jennifer Riordan, later died from her injuries after being in critical condition at a nearby hospital. Seven other passengers were treated for minor injuries on the site.

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