Southwest says travel demand still strong, warns Boeing delays could continue into 2024

Southwest on Thursday joined other airlines in forecasting that strong travel demand will continue but warned that delays in new aircraft deliveries from Boeing could persist into 2024. “While there’s noise regarding whether we are headed into a recession or not or whether we may even be in one now, we have not seen any noticeable impact on our booking and revenue trends,” CEO Bob Jordan said on the company’s quarterly call. The airline reported a $277m profit for Q3 on record revenue of $6.22b, up nearly 33% from last year, despite an $18m impact from Hurricane Ian. Southwest’s shares rose 2.7% on Thursday, while the broader market fell. Airlines this month have forecast further strength in bookings through at least the end of the year. Record revenues have helped carriers cover higher costs, a reversal for one of the hardest-hit sectors in the Covid-19 pandemic. Southwest forecast a jump in revenue for the last three months of the year of between 13% and 17%, compared with 2019 levels. It expects capacity to be down about 2% from three years earlier. The Dallas-based airline said it expects unit costs excluding fuel to be down next year compared with full-year 2022, but said that pilot shortages are limiting flying, which keeps costs up. Supply chain problems, labor shortages and training backlogs have hindered airplane manufacturers from ramping up production to meet the travel boom, capping airlines’ growth, a factor that could keep airfares elevated.<br/>