Southwest sharing the wealth with dividends

Southwest Airlines has become the first major airline to announce that it will reinstate dividends. 

The Dallas-based carrier will pay 18 cents per share quarterly, beginning Jan. 31, returning to dividend levels that were in place prior to the pandemic. Those dividends will amount to approximately $428 million over the course of 2023. 

Under the terms of the Cares Act, which awarded $6.2 billion in payroll grants to Southwest over the course of 2020 and 2021, airlines were forbidden from paying dividends through the end of September. 

Southwest lost $1.3 billion last year, not counting the $2.7 billion it received in Cares Act grants. The carrier lost $3.5 billion in 2020, excluding the $3.4 billion it received in Cares Act funds. 

The airline turned the corner this year and had reported net income of $759 million through the third quarter. This quarter, Southwest expects revenue to be 13% to 17% higher than 2019. 


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“Today’s announcement reflects the strong return in demand for air travel and the company’s solid operating and financial results since March 2022,” CEO Bob Jordan said. “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.”

Ahead of an investor day event Wednesday, the carrier also provided guidance for 2023. For the full year, Southwest expect to fly 15% more seat miles than it will fly this year. The increases will go toward restoring pre-pandemic frequency levels on key routes and resuming routes that were dropped during the pandemic, such as Indianapolis to Kansas City. Southwest does not plan to add new destinations in 2023.

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