Southwest Airlines: April’s fatal emergency landing cost $100 million

Southwest Airlines’
business is still feeling the effects of the emergency landing
that left one passenger dead on April 17.
Mark Makela / Reuters

• Southwest
  Airlines said during its second-quarter earnings call
  on Thursday that April’s emergency landing in Philadelphia cost
  the carrier $100 million in business.
• Revenue from passenger traffic is down 0.4% over the
  same period in 2017.
• CEO Gary Kelly attributed higher fuel prices and the
  effects stemming from the deadly
  April 17 accident on Flight 1380 for the reduced
  revenues.
• Despite the challenges, the airline still posted a
  second-quarter profit. 

Southwest Airlines’ business is still feeling the effects of the
emergency landing that left one passenger dead on April 17. 

“The revenue effects of the accident
reduced second quarter 2018 passenger revenues
by $100 million.
 We expect
the revenue impact from this headwind to be temporary and subside
in third quarter 2018 and are encouraged by the solid rebound in
demand,
” Southwest CEO Gary
Kelly said in
a press release on Thursday.

Kelly continued: “I am especially proud of the heroic
efforts of our People to address and overcome the challenges
resulting from the accident.” 

Twenty minutes into Flight 1380 from New York to Dallas,
an engine exploded in midair, shattering a window. The
explosion prompted an emergency landing at Philadelphia
International Airport as the plane depressurized and lost
altitude.

Seven passengers were taken to the hospital for injuries
sustained during the explosion. Jennifer Riordan, 43, died as a
result of her injuries. Riordan lived in Albuquerque, New Mexico,
where she worked as a vice president of community relations at
Wells Fargo. Riordan is survived by her husband, Michael, and two
children. 

The fatality was the first on an American airline since 2009. The
Dallas-based carrier experienced a decline in bookings following
the increased publicity generated by the tragic accident. The
airline
said in June that it expected its revenue per mile flown to
fall 3%, CNN Money reported. 

On Thursday, Southwest announced that unit revenue did
in fact fall 3% from a year ago.  

Southwest also experienced difficulties stemming from rising fuel
costs. Fuel prices have increased by as much as
50% this year, leading to
lower profit projections by both domestic and
international legacy carriers. 

Despite these challenges, Southwest
still posted a second-quarter profit, with net income of $733
million and second-quarter total operating revenues increasing
0.2% to $5.7 billion. 

However, revenue from passenger traffic, compared to the same
period in 2017, is down 0.4% to $5.36 billion.