DALLAS — In the third quarter, Southwest Airlines reported a record revenue, although its profits experienced a significant decline, dropping nearly 66% to $67 million due to increased costs associated with labor and other expenses.
The airline acknowledged the mounting pressure from hedge fund Elliott Investment Management to enhance profitability. On Thursday, it revealed that its adjusted earnings reached 15 cents per share, surpassing Wall Street analysts’ expectations of only six cents per share.
Additionally, Southwest announced its decision to accelerate the buyback of $250 million in its stock as part of a larger $2.5 billion stock repurchase initiative that was unveiled the previous month.
The company’s revenue saw a 5% increase, totaling $6.87 billion, which exceeded the average analyst forecast by $100 million, according to data from FactSet.
However, the rise in labor costs was significant, increasing by more than 12%, a change attributed to new labor agreements for pilots, flight attendants, and other staff members.
