Southwest Airlines Company (LUV)
Pretax margin
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before tax but after interest (EBT) | US$ in thousands | 633,000 | 728,000 | 1,325,000 | -4,256,000 | 2,957,000 |
| Revenue | US$ in thousands | 25,857,000 | 23,322,000 | 15,381,000 | 9,048,000 | 22,426,000 |
| Pretax margin | 2.45% | 3.12% | 8.61% | -47.04% | 13.19% |
December 31, 2023 calculation
Pretax margin = EBT ÷ Revenue
= $633,000K ÷ $25,857,000K
= 2.45%
The pretax margin of Southwest Airlines Co has exhibited some fluctuations in recent years. In 2023, the pretax margin decreased to 2.43% from 3.06% in 2022, indicating a decline in the company's profitability before accounting for taxes. This downward trend follows a notable decrease from 8.39% in 2021 to -47.04% in 2020, indicating a significant loss-making period for the company. The substantial recovery seen in 2021 after the loss in 2020 was encouraging, but the drop in pretax margin in 2023 raises concerns about the company's ability to maintain consistent profitability levels. It is essential for Southwest Airlines Co to closely monitor its cost management and revenue generation strategies to improve its pretax margin in the upcoming periods.
Peer comparison
Dec 31, 2023