Southwest Airlines Co forecast a higher fourth-quarter revenue on Thursday after beating profit estimates, as it benefited from strong leisure travel demand that is showing no signs of easing in the face of economic worries.
Shares of the U.S. carrier were up 4.9% before the bell.
The company said it expects operating revenue to jump 13% to 17% in the current quarter versus 2019, though it expects to have about 2% lower capacity.
"We currently expect revenue trends to improve sequentially from third quarter to fourth quarter 2022, despite lower capacity," Chief Executive Officer Bob Jordan said in a statement.
Major U.S. carriers are enjoying the strongest consumer demand in three years, but the airline industry is facing higher fuel and wage bills amid worries that consumers may cut travel spending due to recession risks.
"The company continues to experience inflationary cost pressures in fourth quarter 2022, in particular with higher rates for labor, benefits, and airports," Jordan said.