Southwest Airlines shares tumbled nearly 9% Thursday after the airline reported lower unit revenue and higher costs for the second quarter — and said the trends are likely to continue this quarter. The Dallas-based airline’s second-quarter unit revenue dropped 8.3% from a year earlier, Southwest said, citing a policy change last summer that removed expiration dates from Covid pandemic travel credits. The carrier said it expects unit revenue to fall as much as 7% during the third quarter on capacity up 12% from a year earlier. It blamed “challenging comparisons from the pent-up travel demand surge in 2022, and higher than seasonally-normal growth.” Airlines have enjoyed record revenue in recent months, but airfare in the U.S. has dropped from 2022, according to the latest inflation read. Southwest said it is “revamping” 2024 schedules to reflect changing customer demand as business travel revenue recovers but lags pre-pandemic levels. “We are working to align our network, fleet plans, and staffing to better reflect the current business environment,” CEO Bob Jordan said in an earnings release. Jordan said the revamp could mean bigger drops in capacity than usual when demand would normally pick up. The airline also plans to cut some short-haul flights in favor of longer ones as well as reduce very early and very late departures. Here’s how Southwest performed in the second quarter, compared with Wall Street expectations according to Refinitiv consensus estimates: Adjusted earnings per share: $1.09 vs. an expected $1.10; Total revenue: $7.04 billion vs. an expected $6.98 billion. The airline’s net income fell to $683 million, or $1.08 a share, down 10% from $760 million, or $1.20 per share, during the second quarter of 2022. Revenue came in at a record $7.04 billion for the three months ended June 30, ahead of analyst expectations and up 4.6% from the same quarter last year.<br/>
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Surf Air Mobility began trading at $5 a share and fell 37% from there in the first significant direct listing in the US in almost two years. Shares of the venture-backed regional air carrier with plans for electric planes closed at $3.15 Thursday in New York trading. At that price, the company has a market value of roughly $290m based on the outstanding shares indicated in its filings with the US Securities and Exchange Commission. “Now we can go out and get to work,” Stan Little, who is now Surf Air’s CEO, said on the floor of the New York Stock Exchange. “We’ll build the stock price and I have no doubt we’ll eventually get to where we thought we would be, it just won’t be today.” Despite widespread interest, direct listings have been used by only a handful of well-known companies, such as Spotify Technology SA, Slack Technologies Inc. and Coinbase Global Inc. Most recently, eyewear retailer Warby Parker Inc. went public via a direct listing in September 2021. Surf Air launched its plan for a direct listing after the collapse last year of blank-check merger that would have taken the company public at a $1.42b valuation. Before trading began, the exchange had assigned a reference price of $20. Unlike a traditional initial public offering in which shares are sold at the offer price before trading begins, the reference price in a direct listing is merely an estimate of their value, providing a price for trading to begin.<br/>
Brazilian airline Gol on Thursday surprised analysts by bouncing back to a second quarter net profit, but trimmed its full-year revenue forecast as it sees capacity growing by less than previously expected. Gol said in a securities filing it made a second-quarter net profit of 556.3m reais ($117.4m), reversing a 2.8b real loss a year earlier on higher revenue and foreign exchange gains. Analysts had expected a net loss of 152.5m, according to Refinitiv Eikon data. The outperformance sent shares in the firm up as much as 5.6% in early Sao Paulo trading, making it one of the top gainers on Brazil’s benchmark stock index Bovespa, which was near flat. “The firm reported relatively strong margins and yields still at high levels,” Genial Investimentos analysts said. “We expect Gol to continue reporting good figures throughout 2023, driven by still strong demand and a favorable cost scenario.” Operating net revenue hit a record high for the second quarter of 4.14b reais, up 27.9% year on year, Gol said, also beating the 4.08b expected by analysts polled by Refinitiv. “We delivered solid operational performance,” CE Celso Ferrer said. “We continue to prioritize reliability, profitability, and strengthening of our balance sheet.” Despite the positive quarterly revenue figures, Gol trimmed its full-year net revenue outlook to about 19.3b reais from 19.5b, as available seat kilometers are poised to grow by less than previously thought. The carrier added it now forecasts its 2023 EBITDA margin to reach about 25%, up from 24% before. Ferrer said the company remains committed to maintaining low unit cost levels, adding that low-cost discipline would “further strengthen Gol’s competitive advantage” as capacity grows.<br/>
Colombia's state-owned airline Satena will invest $80m to expand and modernize its fleet, with plans to buy short and medium-range aircraft able to land at smaller airports that are not accessible to larger planes, the airline's boss said. Satena is eyeing purchases of eight new twin-engined planes that can carry 19 passengers, General Oscar Zuluaga, the high-ranking air force official who runs the airline, said in an interview late on Wednesday afternoon. "The capitalization is seen at $80m," Zuluaga said, adding the purchases "will allow us greater mobility, generate growth and, above all, bring hope to the most remote regions." Satena generated losses of 2b pesos ($506,000) last year, Zuluaga said, adding the airline hopes to reach break even in the short term, despite difficulties in the aviation sector. The airline, which began serving an international route to Venezuela's capital Caracas from Colombia's Bogota in March, is seeking to grow the number of passengers it carries in 2023 by around 200,000 to 1.2m versus last year.<br/>Satena is also looking to acquire planes with 48 seats to continue expanding into new routes and markets to guarantee the company's sustainability, the general said. More international routes could even take Satena to cities in neighbors such as Brazil, Peru and Ecuador, Zuluaga added.<br/>
Digital rights group NOYB on Thursday filed a complaint against Ryanair, alleging that the airline is violating customers' data protection rights by using facial recognition to verify their identity when booking through online travel agents. NOYB, led by Austrian privacy activist Max Schrems, filed the complaint with Spain's data protection agency on behalf of a complainant who booked a Ryanair flight through the Spanish-based online travel agency eDreams ODIGEO. The Irish airline, Europe's largest by passenger numbers, says on its website that in order to comply with safety and security requirements it must verify the identity of passengers' booking with travel agents because agents often do not provide Ryanair with customers' contact and payment details. Passengers can avoid verifying through facial recognition by showing up at the airport at least 2 hours before departure or submitting a form and picture of their passport or national ID card in advance, a process Ryanair said can take seven days to complete. A similar process is not required when booking through Ryanair's website or mobile phone app. "There is no reasonable justification for Ryanair to implement this system," NOYB said in a statement. "Instead, it seems like the airline is willingly violating their customer's right to data protection in order to obtain an unfair competitive advantage over alternative booking channels." NOYB has successfully launched privacy challenges against some of the world's largest multinational companies across the European Union under the bloc's General Data Protection Regulation (GDPR), introduced in 2018.<br/>
The UK’s aviation regulator has reprimanded Wizz Air over “unacceptable” handling of customer compensation claims for delayed or cancelled flights, ordering the airline to revamp the way it deals with complaints. The Civil Aviation Authority said it had told the low-cost Hungarian carrier to review a swathe of compensation claims involving a UK flight made since March last year. Passengers who have made a claim with Wizz over the past six years can also request to have their case reopened. The regulator cannot at present fine airlines, and has long called for tougher powers. Yet the enforcement action on Thursday was an unprecedented intervention, marking the first time it has made such an order for a carrier to review complaints. Paul Smith, joint-interim chief executive of the CAA, said the regulator had identified a “really unacceptable handling of claims” for compensation and a “failure to pay customers what they are owed”. The claims that the CAA has ordered Wizz to review relate to the airline’s requirement to provide alternative flights, as well as care and assistance such as covering hotel costs. Wizz was caught up in sweeping disruption to hit airlines and airport last summer, when staff shortages led to cancellations and delays across the industry. Handling of the disruption has snowballed into a significant reputational problem for Wizz, which was named “the UK’s worst airline” by consumer group Which? this year. The CAA had already raised “significant concerns” with Wizz in December over a high volume of complaints and delays in paying passengers compensation. A “large number” of county court judgments against Wizz were also found to have been unpaid. The airline has repeatedly apologised for its handling of the disruption last summer, and has invested GBP90mn to improve the resilience of its UK operations, such as increasing staffing levels.<br/>
India’s Go Airlines was on Thursday denied a motion for emergency arbitration in its dispute with US engine maker Pratt & Whitney, a court filing with the US District court of Delaware showed. The airline, also known as Go First, had in May sought an emergency arbitration to prevent it from going out of business and blamed Raytheon Technologies-owned engine maker for its financial woes and bankruptcy filing. It alleged that the US firm supplied “faulty” engines and failed to replace them on time, resulting in the grounding of half of its fleet. Pratt & Whitney has told the court that Go First’s claim is “unfounded”. The engine maker as well as the airline did not immediately respond to requests for comment on the court ruling.<br/>