2024-04-25 21:26:02 ET
Southwest Airlines Co. (LUV)
Q1 2024 Earnings Conference Call
April 25, 2024 12:30 PM ET
Company Participants
Julia Landrum - Vice President of Investor Relations
Robert Jordan - President & Chief Executive Officer
Tammy Romo - Executive Vice President and Chief Financial Officer
Ryan Green - Executive Vice President & Chief Commercial Officer
Andrew Watterson - Chief Operating Officer
Whitney Eichinger - Chief Communications Officer
Conference Call Participants
Michael Linenberg - Deutsche Bank
David Vernon - Bernstein Research
Duane Pfennigwerth - Evercore ISI
Jamie Baker - JPMorgan Securities Inc
Savanthi Syth - Raymond James & Associates
Alexandria Skores - Dallas Morning News
Mary Schlangenstein - Bloomberg News
Alison Sider - Wall Street Journal
Dawn Gilbertson - Wall Street Journal
David Koenig - The Associated Press
Leslie Josephs - CNBC
Rajesh Singh - Reuters
David Slotnick - TPG
Presentation
Operator
Hello, everyone, and welcome to the Southwest Airlines First Quarter 2024 Conference Call. I'm Gary, and I'll be moderating today's call, which is being recorded. A replay will be available on southwest.com in the Investor Relations section. [Operator Instructions].
Now Mrs. Julia Landrum, Vice President of Investor Relations, will begin the discussion. Please go ahead, Julia.
Julia Landrum
Thank you so much. Hello, everyone, and welcome to Southwest Airlines First Quarter 2024 Conference Call. In just a moment, we will share our prepared remarks, after which we will be happy to take your questions. On the call with me today, we have our President and CEO, Bob Jordan; Executive Vice President and CFO, Tammy Romo; Executive Vice President and Chief Commercial Officer, Ryan Green; and Chief Operating Officer, Andrew Watterson.
A quick reminder that we will make forward-looking statements, which are based on current expectations of future performance. and our actual results could differ materially from expectations. As we will reference our non-GAAP results, which exclude special items that are called out and reconciled to GAAP results in our press release. So please refer to the disclosures in our press release from this morning and visit our Investor Relations website for more information.
And now I'm pleased to turn the call over to you, Bob.
Robert Jordan
Thank you, Julia. Hello, everyone, and welcome to our first quarter call. Well, let me state right up front that I am disappointed with our first quarter performance. There are a lot of factors that I'll go into, and there's a lot to cover, including the latest Boeing challenges. More importantly, there are significant efforts and progress underway as we cannot, and we won't be satisfied until we are delivering the kind of returns you expect from Southwest Airlines. So before I go any further, I just want to sincerely thank our people for their extraordinary efforts as we work quickly to drive improvement.
Turning to our performance. We achieved records for first quarter operating revenues and passengers continuing our streak of eight straight quarters of record top line performance. We saw a nice acceleration in managed business revenues up 25% nominally year-over-year. We also continued our streak of solid operational performance. For a while now, we have been consistently running a great completion factor averaging right around 99%, and we continue to improve in nearly all operational and customer metrics. I'm also proud of the progress we made on our open labor agreements. It's been a long road, and I want to recognize everyone involved for continuing to work through to the finish line to reward our amazing employees for their contributions.
Ryan will go into our revenue performance in more detail in a moment. And while our revenue trends were solid in the first quarter and are expected to be solid year again in the second quarter, we need to increase revenue production to offset cost inflation. The biggest opportunity to improve performance and profitability and urgency is continued focus on network optimization and capacity.
We opened 18 new cities during the pandemic and worked hard in 2023 to restore our network and fly our full fleet on the heels of the demand surge in 2022, while that boosted aircraft utilization, it added significant capacity. And when combined with 2023 business travel coming in below projections has resulted in a significant number of new markets under development and a material number of markets that are not performing at the level required in this higher cost environment.
Network adjustments planned last fall are in place as of the March schedule, and they are proving to be largely on track. Those optimization efforts were primarily aimed to adjust for changing demand trends, including lower capacity on Tuesday and Wednesday, a reduction in short-haul business markets and a material reduction in flights during shoulder periods of the day....
Read the full article on Seeking Alpha
For further details see:
Southwest Airlines Co. (LUV) Q1 2024 Earnings Call Transcript