American Airlines and two smaller carriers gave more proof Thursday of the recovery in air travel, posting better-than-expected profit for the fourth quarter, while Southwest Airlines lost money from its late December meltdown.
Southwest said it also expects another loss in the first quarter, although encouraged by booking trends for March. The Dallas-based carrier reported a $220 million loss after taking a hit of $800 million from canceling nearly 17,000 flights over the last 10 days of December.
The airline had signaled it would lose money, but the adjusted loss of 38 cents per share was worse than the 7 cents per share that Wall Street expected.
The U.S. Transportation Department is now investigating whether Southwest scheduled more flights than the company could realistically expect to handle, thereby violating federal laws against deceptive trade practices. Southwest says its schedule was "thoughtfully designed" and the airline had ample staffing.
Southwest blames an "unprecedented storm" that swept the country around Christmas, exacerbating troubles the airline was experiencing with scheduling staff. Other airlines recovered more quickly, however, while widespread cancellations at Southwest dragged on for days.
On Thursday, CEO Robert Jordan again apologized for the meltdown. Southwest, he said, has hired outside experts and created a committee of its board to review the events and reexamine its technology priorities.
Meanwhile, American reported a profit of $803 million. Excluding special items, earnings per share totaled $1.17. Analysts expected $1 per share, according to a FactSet survey.
Revenue was a fourth-quarter record of $13.19 billion, a 40% increase from a year earlier and better than analysts expected, leading to record annual revenue.
The Fort Worth-based carrier returned to a profit for the full year and forecast 2023 earnings in a range of $2.50 to $3.50 per share. For the first quarter, American expects to break even, based on demand and fuel trends.
American's results added to the picture of strong demand for air travel that was reflected in an $843 million profit for United Airlines and $828 million for Delta Air Lines.
Elsewhere in the sector, JetBlue Airways said Thursday it moved to a profit in its fourth quarter after reporting a loss in the year-ago period. The airline earned $24 million, or 7 cents per share. Its adjusted profit was 22 cents per share, beating Wall Street's view of 19 cents per share.
Revenue came in at $2.42 billion, besting the $2.41 billion that analysts expected.
For 2023, the New York-based airline expects to earn up to $1 per share on an adjusted basis with "margins approaching pre-pandemic levels."
SeaTac, Wash.-based Alaska Air posted a fourth-quarter profit of $22 million, or 17 cents per share. Adjusted earnings were 92 cents per share. That's 2 cents better than forecast on Wall Street.
Revenue totaled $2.48 billion, missing Wall Street's estimate of $2.5 billion. The company said its annual revenue of $9.65 billion was the highest in Alaska Air's history.