April 27, 2017 - 8:10 am
Updated April 27, 2017 - 4:47 pm
Southwest Airlines will stop overselling its flights beginning May 8.
The Dallas-based airline, Las Vegas’ busiest commercial air carrier with a 40 percent market share, confirmed the policy change Thursday, the same day it announced slumping first-quarter earnings.
After a nearly 4 percent midmorning stock selloff, Southwest shares recovered slightly, closing down $1.19, 2.1 percent, to $55.75 a share.
Early Thursday, the company announced earnings down 31.6 percent from last year to $351 million for the quarter that ended March 31.
Operating revenue inched up 1.2 percent to $4.88 billion for the quarter.
Earnings per share adjusted for non-recurring costs fell to 61 cents a share, a penny short of of what Wall Street analysts had forecast. Southwest also missed analysts’ projections for revenue.
Like most airlines, Southwest overbooks flights to compensate for no-shows or passengers that miss connections. Southwest CEO Gary Kelly said Southwest was contemplating the policy change for two years, but expedited its implementation after a United Airlines customer was forcibly removed from a flight that was oversold.