Southwest Airlines Company (LUV)
Operating profit margin
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 321,000 | 224,000 | 1,017,000 | 1,721,000 | -3,816,000 |
| Revenue | US$ in thousands | 27,482,000 | 25,857,000 | 23,322,000 | 15,381,000 | 9,048,000 |
| Operating profit margin | 1.17% | 0.87% | 4.36% | 11.19% | -42.18% |
December 31, 2024 calculation
Operating profit margin = Operating income ÷ Revenue
= $321,000K ÷ $27,482,000K
= 1.17%
Operating profit margin is a key financial metric that measures a company's ability to generate profit from its core business activities. Analyzing the operating profit margin trend of Southwest Airlines Company over the past five years reveals fluctuations in profitability.
As of December 31, 2020, Southwest Airlines had a negative operating profit margin of -42.18%, indicating that the company's operating expenses exceeded its operating income significantly. The following year, in December 31, 2021, the operating profit margin improved significantly to 11.19%, signaling a turnaround in the company's operational efficiency and profitability.
However, in the subsequent years, the operating profit margin declined. As of December 31, 2022, the operating profit margin decreased to 4.36%, reflecting a reduction in profitability compared to the previous year. This downward trend continued in December 31, 2023, with an operating profit margin of 0.87%, indicating a further decrease in the company's ability to generate profit from its operations.
In the most recent year, December 31, 2024, Southwest Airlines saw a slight improvement in its operating profit margin to 1.17%. While this represents a recovery from the lowest point in 2023, the margin remains relatively low compared to the peak in 2021.
Overall, the analysis of Southwest Airlines' operating profit margin highlights both the company's resilience in improving profitability after a significant loss in 2020, as well as the challenges it faced in sustaining profitability in the following years. Continued monitoring of the operating profit margin will be crucial to assess the company's operational efficiency and financial performance in the future.
Peer comparison
Dec 31, 2024