(CBS News) — Southwest Airlines (LUV) stock dropped after the carrier said the first accident-related passenger fatality in its 47-year history was followed by decreased ticket sales.
Revenue from each seat flown a mile—a measure of pricing power—will fall 1 percent to 3 percent in the current quarter, Southwest said in a statement Thursday. The discount carrier attributed as much as 2 percentage points of its softer sales on the engine explosion that killed a female customer last week.
“It remains a somber time,” CEO Gary Kelly stated, adding that Southwest is working with federal investigators to understand the cause of the accident that had a piece of the engine tearing through the plane’s cabin and killing a passenger.
Southwest also shut down all of its marketing efforts, including on social media and television, immediately after the accident, with limited advertising efforts resuming this weekend.
Southwest accelerated inspections of the 35,500 engine blades in its fleet, a process set to be completed within 30 days, Kelly said.
The engine that blew up last week was up to date in terms of maintenance, and was due to be inspected later this year, the executive added.
Already down 18 percent for the year, shares of Southwest were down 2 percent in afternoon trading Thursday.
Revenue rose 1.9 percent in the first quarter to $4.9 billion, with a cut in its federal income tax rate “significantly” boosting first-quarter net income.
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