DALLAS (AP) — Fourth-quarter profit fell sharply at American Airlines, and the carrier predicted it would lose money in early 2024, while Southwest Airlines posted a loss, as both carriers struggled to cover rising labor costs.
Southwest also said Thursday that it expects to receive fewer new planes than it expected this year because of ongoing production problems at Boeing.
American said Thursday that it earned $19 million in the fourth quarter, down from $803 million a year earlier. Excluding one-time items, mostly contract-ratification bonuses for pilots, the airline said adjusted profit was 29 cents per share.
Analysts expected American Airlines Group Inc. to earn 11 cents per share, according to a FactSet survey.
Revenue declined 1%, to $13.06 billion, slightly higher than analysts had forecast.
The Fort Worth, Texas-based airline said it expects to lose between 15 cents and 35 cents per share in the first quarter, typically the slowest travel period of the year. However, American forecast that it will earn between $2.25 and $3.25 per share for all of 2024.
Southwest lost $219 million in the fourth quarter, nearly identical to its results in the same quarter a year earlier. Excluding one-time costs, mostly tied to a new contract with pilots, the airline said adjusted earnings were 37 cents per share.
Wall Street expected Southwest Airlines Co. to earn 12 cents per share.
Revenue increased more than 10%, to $6.82 billion, beating analysts' forecast and setting a record for the Dallas-based carrier.
Southwest also said it expects to get 79 new Boeing planes this year, six fewer than it had planned, and none of them will be Boeing 737 Max 7 jets.
Boeing is already behind schedule in gaining regulatory approval for the small Max 7, and that process will likely be pushed back even farther by this month’s accident on a Max 9 after one of those planes suffered a midflight blowout of a panel that plugs spots that can be used for extra doors.
The Federal Aviation Administration announced late Wednesday that it has approved an inspection process that will let United and Alaska airlines resume flying their Max 9s this weekend, ending a three-week grounding.
Earlier this week, United said it expects to lose money in the first quarter because of the grounding.
