Southwest Airlines reported a loss of $91 million for the first quarter, compared to net income of $34 million for the first quarter of 2008. CEO
Gary Kelly said the results were disappointing but not surprising, due to the economy. He said that a rapid weakening in passenger demand during first quarter, particularly among business travelers, led to the first quarter net loss. Kelly said that Southwest had significantly reduced planned capital spending by approximately $1.4 billion for 2009 and 2010 combined by deferring aircraft deliveries, accelerating aircraft retirements, and suspending plans to grow capacity and added that recent promotions and discounting activities have been successful in stimulating traffic, leading to record first quarter load factors.
Kelly said the airline will reduce staffing via a voluntary early-out program to help mitigate cost pressures next year. It told employees it would offer voluntary buyouts and froze hiring and top pay for top officers and senior management. Southwest plans to cut capital spending through 2010 by $1.4 billion by delaying aircraft deliveries, retiring some planes sooner than scheduled and suspending plans to increase capacity. For more information, visit www.southwest.com.
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