Southwest Airlines Co.
LUV,
+3.31%
said Thursday it had net income of $348 million, or 57 cents a share, in the second quarter, after a loss of $915 million, or $1.63 a share, in the year-earlier period, when travel stalled during the global pandemic. The profit was driven by a $724 million offset of salaries and other benefits related to the receipt of proceeds from the Payroll Support Program, a federal relief program for airlines. Excluding that offset, the company had an adjusted loss of 35 cents a share, wider than the 23 cents loss consensus estimate of FactSet analysts. Revenue rose to $4.008 billion from $1.008 billion, topping the $3.939 billion FactSet consensus. "Second quarter 2021 marked an important milestone in the pandemic recovery as leisure travel demand surged," Chief Executive Gary C. Kelly said in a statement. The company generated net income in June, to mark its first monthly profit without the benefit of temporary salary and benefit relief since the start of the pandemic, he said. The rapid ramp-up in travel demand has proved a challenge and the company is now focused on bring back workers and improving operations. Jet fuel prices are also significantly higher and expected to remain so in the third quarter. "To support the return of flight activity, we expect to recall the vast majority of our Employees early from voluntary time-off by the end of third quarter 2021, which is expected to reduce our prior forecasted savings from voluntary leave programs beyond second quarter 2021," said Kelly. The company's load factor stood at 82.9% in the second quarter, while available seat miles were up 86.8%. The company is expecting capacity to rise 49% in the third quarter as travel demand continues to improve. Shares were down 1% premarket, but have gained 14% in the year to date, while the U.S. Global JETS ETF
JETS,
+3.09%
has gained 4% and the S&P 500
SPX,
+0.82%
has gained 16%.