Amid allegations that the aviation industry has sacrificed safety and business principles to center “diversity, equity, and inclusion” initiatives, Southwest Airlines lowered its second-quarter revenue guidance on Wednesday, initially causing stock to slide by 10%.
According to reporting by Market Watch:
The Dallas-based company LUV, -0.21% said it now expects operating revenue per available seat mile to be down 4% to 4.5% for the quarter, down from prior guidance of down 1.5% to 3.5%.
The change is driven primarily by “complexities in adapting its revenue management to current booking patterns in this dynamic environment,” the company said in a regulatory filing. It still expects an all-time quarterly record for operating revenue in the second quarter.
“Anyway you dice it, Southwest continues to struggle in the current environment with more moderate leisure demand after years of strength,” said Melius Research analysts Conor Cunningham and Daragh Regan. “The Southwest specific initiatives have yet to take hold and investors will likely further question the validity of them now.”
…
The airline disappointed investors with its first-quarter earnings, which showed a wider-than-expected loss and revenue that fell short of estimates.
Chief Executive Bob Jordan said that the company is committed to a slew of changes, including a potential end to its hallmark open-seating policy, as it seeks to improve its performance.
The company has struggled since losing over $1 billion during the 2022 holiday meltdown reported on extensively by The Dallas Express.
Not to mention companies like Boeing and Southwest have faced accusations that they have prioritized DEI over their commitment to safety and good business, as covered by DX. According to an internal company presentation shared on X, the airline announced intentions to double racial diversity and enhance gender diversity within its Senior Leadership team by 2025.
Meanwhile, a Southwest flight was among the myriad to elicit safety concerns and a Federal Aviation Administration investigation after an incident last week.