Southwest Airlines has reported stronger-than-expected third-quarter earnings, with a profit of 15 cents per share on an adjusted basis, surpassing analysts' forecasts of zero cents.
The airline's revenue for the quarter reached $6.87 billion, marking a more than 5% increase year-over-year and beating the anticipated $6.74 billion.
Despite a 65% decrease in net income from the same quarter last year, the airline's adjusted net income stood at $89 million, or 15 cents a share.
Southwest Airlines attributed its strong revenue performance to healthy travel demand, particularly as the holiday season approaches.
The airline has laid out a three-year plan to add $4 billion to its earnings before interest and taxes by 2027, including a $2.5 billion stock buyback program.
Additionally, the airline plans to introduce a fee structure for seat selection and offer premium options for extra legroom.
Southwest Airlines has forecasted a unit revenue increase of 3.5% to 5.5% for the fourth quarter, despite a projected 4% drop in capacity compared to the previous year.
The airline remains optimistic about the demand for travel, but acknowledges the ongoing challenges in the operational environment.
Southwest's focus on cost management and revenue generation will be crucial as the travel industry continues to recover from the impacts of the pandemic.