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Southwest Airlines forecasts 3% revenue drop after fatal accident

Southwest Airlines Co. said it was expecting its operating revenue per available seat mile to fall by 3% year on year in the second quarter due to lower bookings following a fatal engine failure aboard a flight in April.

The Dallas-based airline said it reduced its marketing efforts after the Flight 1380 accident that left one person dead. Its previous forecast was a year-over-year revenue decline of 1% to 3% in the second quarter.

The low-cost carrier also trimmed its growth plans for passenger-carrying capacity due to higher oil prices and revenue trends. It now projects available seat mile, or ASM, growth in 2018 to be in the low 4% range, down from its previous plan of a low 5% range.

Second-quarter ASM is forecast to grow 3.5% year over year, compared to a prior guidance of 3.5% to 4% growth.

Southwest's shares seemed to be unaffected by the updated growth forecasts. The stock was up 1.61% to $51.78 shortly after 12 p.m.

An engine on Flight 1380 exploded over Pennsylvania on April 17 due to a blade that broke off mid-flight. Scattered debris shattered a window, causing a female passenger to be partially sucked from the plane. The passenger later died from her injuries.