Southwest Airlines Smiles Cautiously... 1Q Expected Impact from Omicron

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Southwest Airlines, which posted a profit in the fourth quarter of last year, announced that it expects a loss in the first quarter due to the spread of the Omicron variant. However, it forecasted an optimistic profit outlook for this year, as the worst situation during January and February has passed.

According to the Wall Street Journal (WSJ) and others on the 27th (local time), Southwest Airlines made this announcement while releasing its fourth-quarter results for last year. Southwest Airlines recorded a net profit of $68 million in the fourth quarter of last year, a significant turnaround from the $908 million loss recorded in the same period the previous year. WSJ reported, "This is the first quarterly net profit achieved without government support during the pandemic."

However, the situation for Southwest Airlines in the first quarter of this year is not so favorable. The company is facing rising costs and disruptions caused by the spread of the Omicron variant. On this day, Bob Jordan, Vice President of Southwest Airlines, said, "Although significant progress was made last year, the Omicron variant slowed the recovery of demand in early this year." Southwest Airlines reported that leisure and business travel demand during January and February was weaker than initially expected.

Nevertheless, Vice President Jordan stated, "As the number of new COVID-19 cases is declining, it appears that the worst is over, and the booking trend for March looks optimistic." This means that as the Omicron situation gradually weakens, flight demand is also recovering. Accordingly, Southwest Airlines is expanding its hiring as demand recovers. The company announced that it plans to increase its hiring scale from about 5,000 last year to 8,000 this year.

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