TEXAS, USA — Southwest Airlines released its fourth-quarter earnings report Thursday and it shows the company had a net loss of $1.3 billion in 2021 or $2.15 loss per diluted share.
The Dallas-based airline had a full-year net income of $977 million, or $1.61 per diluted share, driven by a $2.7 billion offset of salaries, wages, and benefits expenses related to the receipt of funding from the Payroll Support Program under the American Rescue Plan Act.
Southwest Airlines was facing staffing issues in the early part of January, company officials said. The airline temporarily extended incentive pay for operations employees through early February.
The company is planning to add at least 8,000 employees this year.
Earlier in January, American Airlines also released its fourth-quarter earnings, and it shows they are down $9.4 billion, or 17%, compared to the fourth quarter of 2019.
The Fort Worth-based company reported it took a net loss of $921 million for the quarter and a loss of $2 billion for the year, even with federal assistance.
Overall, Southwest Airlines reported a fourth-quarter net income of $68 million, or $0.11 per diluted share.
This is the company's first quarterly profit, excluding special items since the fourth quarter of 2019 before the COVID-19 pandemic began, according to Southwest Airlines CEO Gary Kelly.
"Leisure travel demand was strong, particularly during the holidays, and business revenues continued to recover compared with 2019 levels," Kelly said in a press release.
Kelly said Southwest Airlines also made incremental revenue from the company's new co-brand credit card agreement secured in December 2021.
"While we continue to manage through an incredibly challenging operating environment, we made much progress in our recovery in 2021 and are well-positioned for future growth with our industry-leading balance sheet," Kelly said.
Nearby Fort-Worth-based American Airlines recently announced it is reducing its departures at DFW Airport in March by approximately 1,600 flights or 52 flights per day.
On Feb. 1, Bob Jordan will become the sixth CEO of Southwest Airlines, replacing Gary Kelly, who held the position for 18 years.
"Bob has been hard at work on the transition and is well-prepared to take on this important role," Kelly said. "I have the utmost confidence in Bob, our Leadership Team, and the People of Southwest to lead the Company forward and execute a solid strategy."
Jordan said the Omicron variant has delayed the "demand improvement" the company was expecting in early 2022.
"With COVID-19 cases trending downward, the worst appears to be behind us, and we are optimistic about current bookings and revenue trends for March 2022," Jordan said. "Looking ahead, I am optimistic about our future. We have a solid strategy and intend to reinforce and build upon the core strengths of Southwest with several initiatives that we expect to create value and deliver significant financial benefits.