The federal government shutdown has cost Southwest between $10 million and $15 million in revenue this month, the carrier estimated Thursday.
In addition, the shutdown has resulted in Southwest delaying launch of Hawaii service from what it had hoped would be February until no sooner than March, CEO Gary Kelly said. If the shutdown lasts more than another week, the Hawaii launch will be pushed back into the second quarter, he added.
"I'll sum it up in a word. It is maddening," Kelly said during the Southwest's quarterly earnings call.
The carrier's CFO, Tammy Romo, noted that Southwest does a relatively small amount of government travel business relative to network competitors. "But it's still meaningful, and we're keeping an eye on it," she said.
Southwest joined Delta among the four primary U.S. carriers in putting a dollar figure to the impacts of the shutdown, which is now in its 33rd day. Last week, Delta estimated the closure would cost it $25 million this month. United and American chose not to quantify the cost during recent earnings calls.
The shutdown is delaying Southwest's Hawaii plans because FAA inspectors aren't available to assist the carrier in obtaining the required Extended Operations Service (Etops) authorizations that it needs to fly to Hawaii. Two weeks ago, the FAA called back 1,700 inspectors who had previously been told to stay home due to the shutdown. But, said Southwest COO Mike Van de Ven, they are only allowed to do safety work.
"Until the shutdown ends, we are at a total standstill," he said.
Kelly said that Southwest is late in the Etops authorization process and that prior to the government closure it had an inspection schedule set with FAA that, assuming smooth progress, would have allowed for the commencement of Hawaii ticket sales next week. That, in turn, would have meant the February launch of Hawaii flights.
Now, said Kelly, Southwest will need six weeks between when the FAA resumes the Etops authorization process and its first Hawaii flight, meaning the launch has been pushed back to March and could soon be delayed until April.
Southwest plans to fly to Hawaii from the California cities of Oakland, San Jose, Sacramento and San Diego but hasn't announced specific routes. Its Hawaii destinations will be Honolulu, Maui, the Big Island of Hawaii and Kauai.
Hawaii complications aside, Kelly spoke bullishly as Southwest reported earnings Thursday.
The carrier had pretax earnings in the fourth quarter of $817 million, up 11% year-over-year. For all of 2018, Southwest recorded pretax earnings of $3.16 billion, down 3.1%.
Southwest's revenue for the fourth quarter was $5.7 billion, up 8.5% on a year-over-year basis and $30 million more than analyst estimates, according to the website Seeking Alpha. Overall 2018 revenue was $21.97 billion, up 3.9% from 2017.
On the expense side, costs were up 8.1% year-over-year in the fourth quarter and 5.8% for the whole of 2018. Higher fuel costs as well as a 4.7% increase in salaries and wages drove the 2018 expense jump.
Southwest stock was up nearly 7% in late afternoon trading.