DALLAS (AP) – American Airlines and Southwest Airlines both posted second-quarter profits on Thursday thanks to generous federal pandemic aid that covers most of their labor costs.
Thursday’s reports underscored the progress airlines are making in rebuilding after the coronavirus devastated air traffic – and how far they still have to go to fully recover.
Southwest said it made money in June even without federal aid. CEO Gary Kelly said the final quarter was “an important milestone in the pandemic recovery as the demand for leisure travel increased”.
Both airlines achieved sales well above the 2020 level. This reflects the increasing number of people taking flights in the US – currently about 2 million a day, or about 80% of pre-pandemic levels. Domestic vacation travel has roughly returned to normal, but business and international travelers are still largely absent.
American Airlines posted profits of $ 19 million in the second quarter, including nearly $ 1.5 billion in federal aid. Without taxpayer funding and other special items, American would have lost $ 1.1 billion, or $ 1.69 per share. Still, this is the US’s smallest adjusted loss for any quarter since 2019, and the adjusted loss was below the analyst forecast of $ 2.03 per share, according to a FactSet poll.
The Fort Worth, Texas-based American’s revenue more than quadrupled year over year, but declined 37% from the same quarter of 2019.
Southwest reported a profit of $ 348 million, offsetting last year’s loss of $ 915 million in the same three-month period. Without government relief and other special items, the Dallas-based airline would have lost 35 cents per share – more than analysts’ forecasts of 21 cents per share.
Revenue quadrupled year over year to $ 4.01 billion but remained 32% lower than the same quarter of 2019.
As passengers keep coming back, airlines are adding flights. Last year, when the airlines were on the verge of financial ruin, they persuaded thousands of employees to quit or take long-term leave. Now labor shortages are contributing to massive flight delays and cancellations, and airlines are struggling to recruit workers.
American recently announced plans to increase its workforce by calling 3,300 flight attendants back from vacation later this year and hiring 800 more by next spring. This year 350 pilots are to be hired, next year more than 1,000.
In trading prior to the opening bell, American Airlines Group Inc. and Southwest Airlines Co. each fell around 2%.
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