Southwest Airlines Earnings Report Shows $116 Million Profit During Pandemic

Southwest Airlines Earnings Report

Southwest Airlines Earnings Report Shows Surprise Profit

Southwest Airlines Earnings report was just released and their first quarter results showed $116 Million in profit, that surprised many! Let’s dive into the details.

Southwest Airlines Earnings Report-What Happened:

Most large airline companies released earnings last week including Delta, American Airlines, and United. They all showed a loss in their 2021 first quarter earnings, as was expected due to Covid-19. Then Southwest announced its earnings and surprised everyone with a first quarter profit! 

Southwest Airlines Earnings Report-How Did They Do It?

Southwest was able to get a profit with the help of federal funding but there is more to the story. Southwest was focused on domestic travel without business class, unlike the large airlines including Delta, United, and American.

Southwest focuses on providing cheap flights within the US. This worked out well since most international travel is restricted to essential or shut down completely. Additionally, Southwest doesn’t typically offer Business or First Class seats and with business travel cut due to Covid, they are able to offer more cheap seats for regular non-business travelers. 

Southwest Airlines Earnings Report-Future Outlook of Southwest Airlines:

Southwest has the perfect game plan for the current state of the world, and maybe the future. The future is unknown but with the vaccines rolling out, international travel should eventually come back to normal. This however is not a big part of Southwest’s business, so with the focus on Domestic travel they seem to have a steady future.

Additionally, with most companies forced to work from home during the pandemic many are seeing additional profit from reduced business travel and expenses. Some executives believe that business travel might never get back to pre-pandemic levels. This also plays into Southwest’s favor since they don’t really offer business or first class seats. 

Does the Southwest Airlines Earnings Report Indicate a Good Investment?

With a profit in hand already in the first quarter and the way their business plan, Southwest Airlines looks to be setup for success. These are great qualitative aspects of fundamental analysis for Southwest, but don’t forget to look at the quantitative (numbers) as well. Also don’t forget about technical analysis, specifically the trend line ?.

Published 4/23/2021

Leave a Reply

Your email address will not be published. Required fields are marked *

Scroll to Top