Southwest Airlines 3rd Quarter Profits Spike Despite Grounding Of 737 Max Jets
DALLAS (CBSDFW.COM/AP) — Southwest Airlines is holding its own through the grounding of its Boeing 737 Max aircraft fleet, reporting a 7% jump in profits and record operating revenue.
Southwest had more Max jets than any airline when the plane was grounded in March after crashes involving other carriers in Indonesia and Ethiopia killed 346 people.
Strong travel demand and rising ticket prices helped offset its Max jet issues, but the airline is still looking to be compensated by Boeing.
Southwest CEO Gary Kelly said, "We are engaged in ongoing discussions with The Boeing Company (Boeing) regarding compensation for damages related to the MAX groundings. The operating income reduction from the MAX groundings is estimated to be $435 million for the nine months ended September 30, 2019, and we expect the damages to continue to grow into 2020.
On Thursday, Southwest Airlines Co. reported third-quarter profit of $659 million, or $1.23 per share. That easily topped Wall Street expectations for $1.09, according to a survey by Zacks Investment Research.
Revenue of $5.64 billion was in line with expectations.
(© Copyright 2019 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)