Southwest Sees Bookings Drop After Engine Failure

Southwest Airlines expects its operating revenue per available seat mile (RASM) to drop by about three percent in the second quarter on lower bookings after April’s fatal engine failure.

It said the fall in bookings was largely due to a reduction in marketing following an engine fan blade failure on a Southwest Boeing 737 caused the death of a passenger.

As a result of the dip in bookings and higher oil prices, the Dallas-based airline has also tempered its available seat mile (ASM) capacity growth for 2018 to be in the low four percent range. That is down from the previous plan to boost ASM capacity by just over five percent for the year.

The low cost carrier now expects ASM growth in the second quarter 2018 to be about 3.5 percent, at the lower end of its 3.5 to 4 percent previous guidance.

For the second half, ASM growth is expected to be down from its previous 7 percent to approximately 6 percent.