Southwest Airlines posts smaller loss on strong travel demand

[October 21, 2021]  (Reuters) - Southwest Airlines Co posted a smaller third-quarter loss on Thursday as widespread vaccinations boosted travel demand ahead of the peak holiday season.

 A Southwest Airlines jet sits at a gate at Orlando International Airport in Orlando, Florida, U.S., October 11, 2021 . REUTERS/Joe Skipper

"Despite the deceleration of traffic in August and September due to surging COVID-19 cases, the third quarter 2021 demand and revenue performance was quite strong," said Chief Executive Officer Gary Kelly.

The company flagged lingering effects from the summer COVID-19 surge and recent operational challenges to fourth-quarter revenue, but said it was encouraged by renewed momentum in leisure and business traffic.

Despite robust demand, a recent surge in fuel prices has proved painful for the aviation industry with Delta Air warning of a fourth quarter pre-tax loss on higher fuel expenses and suggesting it might have to pass on higher costs to consumers.

Excluding items, the Dallas-based airline's net loss narrowed to $135 million, or 23 cents per share, in the quarter ended Sept. 30, from $1.17 billion, or $1.99 per share, a year earlier.

Total operating revenue surged 161% to $4.68 billion from a year earlier.

(Reporting by Sanjana Shivdas in Bengaluru; Editing by Vinay Dwivedi)

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