Southwest Airline’s first passenger fatality still is costing the company money and expected to drag down sales well into the summer travel season.
On Monday, Southwest said it expects a three percent decrease in revenue per available seat mile in the second quarter. That slump is at the lower end of predictions the company made in April, when President Thomas Nealon said lost revenue per available seat mile — a key metric in the industry — would land somewhere between one and three percent down, in part because of the April incident.
The airline said the decrease is mainly driven by lower bookings after it scaled back marketing because of the fatal accident on April 17, in which one passenger died and seven others were injured.
An engine on Southwest Flight 1380 exploded and forced the plane into an emergency landing, resulting in the first passenger fatality on a U.S. carrier since 2009 — and Southwest’s first passenger fatality in its 51-year history.
Still, analysts seemed assured that the airline would bounce back. In a report published Monday, analysts at Cowen wrote that the burden on bookings would be short-lived.
“We view the near-term impact from Flight 1380 as one time and expect bookings to normalize shortly,” the analysts wrote.
They added that in recent conversations with Southwest’s management and investors, it was clear that the airline’s lack of marketing after the April accident would mean a negative hit on bookings.
ARTICLE CONTINUES BELOW ADVERTISEMENT
Shortly after the incident, Southwest scaled back its usually upbeat advertisements and commercials. Only in mid-May did the company return its advertising to normal levels.
At the same time, Southwest announced a four-day sale offering some one-way fares for as low as $49. The deals promoted cheap, domestic flights for summer travel, with other discounted prices of $79, $99 and $149.
That deal followed other incidents on Southwest flights. On May 12, a plane experienced a “pressurization event” and made an emergency landing in Dallas. Just 10 days earlier, another flight en route to Newark had to land in Cleveland after a window cracked on board.