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Southwest Airlines is reinstating its quarterly dividend that it suspended firstly of the Covid-19 pandemic in 2020, the most recent signal of the airline trade’s restoration.
The $54 billion in federal support that airways obtained to maintain paying staff in the course of the pandemic prohibited dividends and share buybacks, restrictions that lifted this fall.
The 18-cent dividend will probably be paid after the market closes on Jan. 31., Southwest mentioned in a submitting Wednesday, forward of an investor presentation.
U.S. airways have returned to profitability and CEOs have been upbeat about continued journey demand, even whereas business leaders in different industries together with banking and know-how have warned about financial weak point.
“Today’s announcement reflects the strong return in demand for air travel and the Company’s solid operating and financial results since March 2022,” mentioned Southwest CEO Bob Jordan in a news launch.
Southwest reiterated it expects fourth-quarter income to be up as a lot as 17% over 2019, earlier than the pandemic, an indication greater fares proceed to drive airways’ restoration.
The Dallas-based airline mentioned it expects to develop capability subsequent yr by as much as 15% in contrast with 2022.
At the corporate’s investor presentation Wednesday, executives have been anticipated to handle questions on prices, pilot hiring and pending labor contracts.
Southwest is at present in tense contract talks with its pilots and flight attendants for brand new contracts.
“I think today really put an exclamation point about where their priorities are,” Casey Murray, president of the Southwest Airlines Pilots Association, the pilots’ labor union, instructed CNBC. “Today, with the announcement of dividends with really no real commitment to closing this contract, it’s disappointing.”
Southwest pilots picketed outdoors of the New York Stock Exchange forward of the investor day presentation.
The planes are at present topic to new cockpit alert requirements and lawmakers have not issued a waiver earlier than a year-end deadline underneath the principles, put in place after two Max crashes in Indonesia and Ethiopia.
Southwest mentioned its 2023 capital expenditures would vary from $4 billion to $4.5 billion, largely funds to Boeing for brand new planes. The airline has each 737 Max 8 and Max 7s on order.
The provider expects to take supply of about 100 planes subsequent yr, fewer than outlined in its order ebook due to Max 7 certification delays and anticipated Boeing provide chain issues, it mentioned within the presentation.