Southwest Airlines doesn't expect to make a profit in the first quarter because of rising fuel prices.
Speaking at an investor conference in New York on Tuesday, chief financial officer Laura Wright said fuel will cost 15 cents more per gallon than it had previously forecasted as the airline expects it will pay an average of $3.50 per gallon of jet fuel in the first quarter.
"This fuel increase is a significant hurdle for us to overcome and based on the current revenue and fuel estimates, we currently do not anticipate a profit in the first quarter," Wright said. "Our outlook for the rest of the year remains favorable but again it is highly dependent on a stabilized fuel environment as well as an economic environment that provides the opportunity for revenue growth."
Travel bookings fell off at the end of February but Wright said that March bookings "remain good" and that it is too early to tell if the weakness in February was an anomaly or a sign of trouble in the economy.
Wall Street analysts are currently predicting that Southwest would post a 4 cents per share profit, according to FactSet Research.