Southwest Airlines (NYSE: LUV) outlined selected financial trends for Q4 in an SEC filing on Friday. The low-cost carrier stated that during the holiday season which is a peak season for the airline, LUV canceled more than 16,700 flights.
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Moreover, it estimates that its Q4 seat miles capacity is likely to decline by 6% versus the fourth quarter of 2019 and is below its prior forecast.
Considering these flight disruptions, LUV expects to report a net loss in Q4 driven by a “pre-tax negative impact in the range of $725 million to $825 million.” The company added that a large portion of this impact will also be due to a loss in Q4 revenues in the range of $400 million to $425 million.
Disappointingly, the company expects its operating expenses to increase “primarily due to estimated travel expense reimbursements to Customers, the estimated value of Rapid Rewards points offered as a gesture of goodwill to Customers that are expected to be redeemed, and premium pay and additional compensation for Employees.”
However, Wall Street analysts remain bullish about LUV stock with a Strong Buy consensus rating based on eight Buys and two Holds.
