Southwest cautions of increased annual expenses as quarterly earnings decline.

(Reuters) – Southwest Airlines is facing challenges ahead as it warns ⁢of higher labor costs for the year and signals softer pricing for the current quarter. This news has sparked concerns about rising operational expenses and their potential impact on travel demand, especially with strained household budgets.

The carrier’s shares were down 5% in premarket trading.

The largest domestic U.S. airline expects revenue​ per available seat mile (RASM) to fall between ⁣3% and 7% in the third quarter, while capacity is expected to⁣ be up about 12%.

However, Southwest remains optimistic about the quarter, anticipating profitability and a record-breaking operating revenue.

The airline attributes the decline in RASM,‌ a measure of pricing power, to tough comparisons from‌ the travel demand ⁣boom ⁤experienced last‌ year.

Despite concerns over rising interest rates impacting consumers’ disposable income, U.S. airlines have expressed confidence in travel demand due​ to limited‌ capacity. However,⁣ recent U.S. ‍inflation data showing a third consecutive monthly drop in airline fares ⁣has amplified worries. Additionally, Alaska⁢ Air Group reported that surging international ‌travel demand has ⁢taken a share from domestic travel.

Labor costs are expected to weigh on airlines’ ⁤earnings this year. Southwest, which has yet to‌ reach a⁢ new agreement with its pilots, now predicts a‌ smaller decline of 1% to 2% in cost per available seat mile, excluding fuel, for 2023. Fuel costs have also been revised upwards to $2.70 to $2.80⁤ per gallon.

Southwest is also adjusting ​its 2024 flight schedules to reflect changes in customer travel patterns following the pandemic.

In the second quarter, higher expenses ​impacted Southwest’s profit, which fell to $683 million, or $1.08 per share, from $760 ⁢million, or $1.20 per share, in⁤ the previous year. However, total operating revenue grew‍ 4.6% to $7.04 billion.

(Reporting by Shivansh Tiwary ⁣in Bengaluru; Editing ⁢by Anil ‌D’Silva)

At least six people are injured ⁣after a ⁣Manhattan construction crane catches fire and plummets 45 stories.

Hunter’s Plea Deal is struck down while Mitch McConnell shows he’s 81.

The Federal Reserve resumed its aggressive rate hikes to tackle inflation, raising the interest rate by a ⁣quarter-point ​today.

South Carolina Congressman Ralph Norman tells One America News‍ that there is enough evidence and the time has come for a House-initiated impeachment of Joe Biden.

By Alexander Marrow and Gleb Stolyarov (Reuters) – Russian tech giant Yandex reported a 27% fall in second-quarter net profit on Thursday as…

By Alexander Marrow and Gleb Stolyarov (Reuters) – Russian tech giant Yandex reported a 27% fall ‍in second-quarter net profit on Thursday ‌as…

DUBLIN (Reuters) – Digital rights group NOYB on Thursday filed a complaint against Ryanair, alleging that the airline is violating customers’ data…

DUBLIN (Reuters) – Digital rights group NOYB on Thursday⁤ filed⁤ a complaint against Ryanair, alleging that the airline is violating customers’ data…