Southwest Airlines Resumes Dividend Payments To Shareholders
Southwest Airlines shareholders are feeling the glow of the airline’s rapid post-pandemic rebound. Following a strong 2022 and a positive outlook for Q4, Southwest Airlines is reinstating its quarterly dividend in 2023.
Despite a slow start to the year for the US aviation industry, Southwest Airlines has powered through 2022, recording consistent increases in capacity and income quarter on quarter owed to the sharp rise in demand for leisure travel. The low-cost carrier posted a record $6.2 billion operating revenue during Q3, with CEO Bob Jordan expressing continued optimism through the remainder of the year.
October’s momentum appears to have been sustained. Ahead of its yearly investor day on December 7, Southwest has announced it will be reinstating its quarterly cash dividend following the close of Q4. At $0.18 a quarterly share, the dividend is equivalent to its pre-pandemic level, amounting to a $428 million annual yield. In a company statement, Jordan noted;
“We are pleased with the Board’s decision to reinstate our quarterly dividend for Shareholders. Today’s announcement reflects the strong return in demand for air travel and the Company’s solid operating and financial results since March 2022.”
Photo: Getty Images
“As we bring the year to a close, our fourth quarter 2022 outlook remains strong, and we have a solid plan for 2023. The reinstatement of our quarterly dividend also reflects our balance sheet strength and continued focus on generating consistently healthy earnings, margins, and long-term capital returns.”
Southwest Airlines is the first US carrier to restore shareholder dividends, initially suspended in early 2020 following financial uncertainty caused by the pandemic, and to align with the requirements of federal aid. The dividend is set to be paid on January 31, 2023, upon market close.
2023 and beyond
Looking ahead to next year, Southwest has already moved to bolster capacity across its network, offering a 10% increase for the first quarter. Q2’s expansion remains unclear, following continued delays with its Boeing 737 MAX orders, though Southwest has previously noted it expects to have restored 90% of its 2019 network by the end of 2023.
A SWAPA photo from the Sept. 21 Informational Picket
In line with its capacity increase, the airline has also been undertaking a significant recruitment drive to boost its employee numbers. In September, Southwest revealed it had hired 3,000 new flight attendants, tripling its entire hiring figures in 2018. As reported by CNBC, another 7,000 flight attendants are in its “hiring pipelines,” but no timeline has been given for the process.
Like many airlines across the US, Southwest’s recruitment drive has not come without controversy. In October, the carrier announced plans to seek federal clearance to hire foreign pilots to solve its crew shortage, met with significant backlash from its pilot’s union (SWAPA). SWAPA has frequently criticized the airline for failure to resolve its issue with fatigued workers, low pay, and lack of maternity leave.
An informational picket is planned during Investors Day in New York following a continued dispute over company culture. Federal mediation between the union and airline management was requested prior to a similar picket in September, though an agreement is yet to materialize.
What are your thoughts on Southwest’s ongoing recovery? Let us know in the comments.
- IATA/ICAO Code:
- Airline Type:
- Low-Cost Carrier
- Baltimore/Washington International Thurgood Marshall Airport, Dallas Love Field, Denver International Airport, Harry Reid International Airport, Hartsfield-Jackson Atlanta International Airport, Houston Hobby Airport, Los Angeles International Airport, Midway International Airport, Oakland International Airport, Orlando International Airport, Phoenix Sky Harbor International Airport
- Year Founded:
- Robert Jordan
- United States
For more updates check below links and stay updated with News AKMI.
Life and Style || Lifetime Fitness || Automotive News || Tech News || Giant Bikes || Cool Cars || Food and Drinks