Southwest Airlines Co., which serves Bradley International Airport and is expanding to Boston and New York airports later this year, today reported a surprisingly large loss in the first quarter as traffic fell in what the CEO called the carrier’s toughest revenue environment ever.
The company said today it was freezing hiring and offering buyouts to employees to trim its work force.
And Southwest said it expects a key revenue measurement to fall again in the second quarter.
Southwest said it lost $91 million in the first quarter, or 12 cents per share, including $71 million due to the falling value of its fuel hedges.
Without the fuel-hedges item the airline would have lost $20 million, or 3 cents per share, on $2.36 billion in revenue. A year ago, the company earned $43 million, or 6 cents per share, excluding special items.
Analysts, who usually exclude items from their forecasts, had expected Southwest to lose a penny per share on revenue of $2.4 billion in the first quarter, according to a survey by Thomson Reuters.
Over the first three months of the year, Southwest’s traffic fell 4 percent, a smaller decline than at most other U.S. airlines. And traffic seemed to stabilize in March, when it declined only 0.4 percent from March 2008.
But the more-lucrative business travel remained weak, contributing to the loss at Dallas-based Southwest, which went 17 years without a losing quarter until last fall but now has posted three straight losing periods.
“Our first quarter 2009 financial results are disappointing but not surprising given the current economic environment,” Chief Executive Gary C. Kelly said in a statement. “We face the toughest revenue environment in our history.”
Southwest told employees today it would offer voluntary buyouts to reduce its work force. The company didn’t say how many jobs it wants to eliminate, and it didn’t detail the offers but said they applied to nearly all employees, who have until June 19 to accept.
The airline said it also froze hiring and froze pay for top officers and senior management.
Kelly said the airline was going ahead with already announced expansion plans, which include new service at New York’s LaGuardia Airport and Boston’s Logan Airport later this year.
At 11 a.m., Southwest traded at $6.58, down $1.05, or 13.7 percent. (AP)
