January 24, 2019 / 11:43 AM / 3 months ago

Southwest Airlines flags government shutdown impact; profit beats

FILE PHOTO - A Southwest Airlines Boeing 737-800 plane is seen at Los Angeles International Airport (LAX) in the Greater Los Angeles Area, California, U.S., April 10, 2017. REUTERS/Lucy Nicholson

(Reuters) - Southwest Airlines Co (LUV.N) said on Thursday the U.S. partial government shutdown had knocked between $10 million and $15 million off its revenue so far in January as it reported a better-than-expected fourth-quarter profit.

Earlier this month, Dallas-based Southwest said the shutdown was delaying its plan to launch service to Hawaii, which needs approval from federal government. Southwest was planning to start Hawaii service early this year.

But as the shutdown dragged into its 34th day, many federal workers, including those who oversee route authorizations and aircraft certifications, remained furloughed.

“We are anxious for the government to resolve this shutdown so we can bring low fares and a boost to Hawaii’s travel and tourism industry,” Southwest Chairman Gary Kelly said.

The fourth largest U.S. airline by passenger traffic forecast unit revenue, a closely watched performance metric that compares sales to flight capacity, to rise in the four to five percent range in the quarter, helped by healthy passenger demand and strong fares.

Dallas, Texas-based Southwest, which reported a 1.8 percent rise in unit revenue in the quarter ended Dec. 31, said net income fell to $654 million, or $1.17 per share, from $1.75 billion, or $2.94 per share, a year earlier.

The year earlier quarter included a tax benefit of $1.3 billion.

Total operating revenues rose 8.5 percent to $5.70 billion.

Analysts on average had expected quarterly profit of $1.07 per share and revenue of $5.67 billion, according to IBES data from Refinitiv.

Reporting by Tracy Rucinski in Chicago and Ankit Ajmera in Bengaluru; Editing by James Emmanuel

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