DALLAS — Southwest Airways’ third-quarter revenue fell 30% to $193 million regardless of file income as leisure journey boomed over the summer time, and the airline is dropping pricing energy on the similar time that labor prices are rising.

Southwest mentioned Thursday that it’s going to throttle again development plans subsequent yr due to adjustments in journey, together with a disappointingly gradual restoration in enterprise journey.

“The entire sector is below stress clearly,” CEO Robert Jordan mentioned on CNBC. “Prices are rising, and loads of that’s labor value.”

The outcomes, and significantly Southwest’s plans to develop extra slowly, are doubtless so as to add to concern that demand for reasonably priced home journey — the center of Southwest’s enterprise — is weakening.

Two funds airways that additionally goal price-conscious vacationers reported losses within the third quarter.

Spirit Airways blamed its $158 million loss on softer demand and discounted fares. CEO Ted Christie mentioned demand and costs haven’t returned to regular, even for vacation journey, and he mentioned Spirit will reduce its development plans.

Frontier Airways misplaced $32 million. CEO Barry Biffle mentioned greater gasoline costs and “uneven demand restoration” had been key components, and he mentioned the airline will focus development on under-served markets.

Airways have aggressively added flights this yr, which seems to be pushing fares decrease. Jordan declined to say that Southwest has added too many flights, however he conceded that profitable enterprise journey has not recovered as shortly because the airline anticipated and that demand from leisure flyers is dropping extra sharply in off-peak seasons like fall and late winter.

Southwest has fought again by rising the frequency of fare gross sales to fill seats. Chief Business Officer Ryan Inexperienced mentioned on a name with analysts that the gross sales run “when we’ve got distressed stock to promote” however aren’t out there on high-demand flights.

Southwest executives mentioned bookings for Christmas are operating forward of final yr’s tempo.

Nonetheless, Southwest forecast that pricing energy will weaken within the fourth quarter. Income for every seat flown one mile, a carefully watched measure of costs, will decline 9% to 11% within the fourth quarter in contrast with the identical interval final yr. That could be a a lot sharper drop than these anticipated by Southwest’s bigger rivals.

That underperformance is probably going the rationale that Southwest will reduce its aggressive development plans early subsequent yr.

The airline expects fourth-quarter passenger-carrying capability to extend a surprising 21% in contrast with the identical interval final yr. Southwest mentioned it can reduce that development in half within the first quarter of subsequent yr — to between 10% and 12%, 4 factors lower than beforehand deliberate.

By the second half of subsequent yr, Jordan mentioned, Southwest will fly fewer seats than it can in the identical interval this yr.

Raymond James airline analyst Savanthi Syth mentioned the capability cuts are deeper than buyers anticipated and, together with related slow-growth plans by different U.S. airways, “doubtless bodes nicely for future pricing developments.”

Southwest’s third-quarter revenue slipped from $277 million a yr in the past and, excluding particular gadgets, labored out to 38 cents per share. That matched Wall Road expectations, in accordance with a FactSet survey of analysts.

Income rose $305 million, or 5%, to $6.52 billion, simply in need of projections for $6.56 billion. Bookings near departure had been decrease than anticipated in August and September.

Labor prices rose by $406 million, a rise of greater than 17%. Southwest has agreed to new contracts with a number of labor teams together with flight attendants this week, however it’s the solely one of many nation’s 4 largest airways that has not but settled with pilots, the costliest group.

Pilots at American, Delta and United have obtained pay raises totaling round 40% over 4 years. Southwest doubtless will likely be compelled to simply accept related phrases for its pilots, who picketed at firm headquarters in Dallas on Thursday.

The airline saved $186 million within the third quarter as a result of gasoline was cheaper than a yr earlier. Gas costs have been rising not too long ago, nevertheless, and Southwest expects to pay extra per gallon within the fourth quarter than it did within the third.

Southwest relies upon closely on leisure journey inside america and would not provide enterprise class and different high-end perks. That helped the airline final yr, as journey rebounded after two pandemic-plagued years, however worldwide journey and premium seats are promoting extra briskly this yr, boosting different carriers greater than Southwest.

Delta Air Traces and United Airways every reported $1.1 billion in revenue and double-digit income development, though United’s shares fell after it gave a dour outlook for the fourth quarter. American Airways misplaced $545 million, however solely after taking $983 million in fees to cowl contract-ratification bonuses for pilots.

Shares of Southwest Airways Co. slid greater than 3% after the market opened, however had reduce the loss to lower than 1% in afternoon buying and selling.

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