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Southwest just issued a chilling warning to the airline industry (LUV)

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Boeing 737 MAX Southwest Airlines

Southwest Airlines is getting pummeled Thursday morning even though the company reported a 35% increase in quarterly profits.

Shares of the low-cost airline plummeted 9% in morning trading. 

Southwest reported $820 million in profits for the second quarter of 2016 — up from $608 million during the same period last year. 

However, investors are more concerned with the airline's warning that it is expecting unit revenue to fall as much as 4% next quarter due to lower ticket prices and greater levels of competition.

Even though America's fourth largest airline has saved 10% on fuel costs last quarter while returning an operating margin in excess of 18%, the airline also reported that ticket prices have fallen 3.7%. 

Earlier this week, United Airlines also reported experiencing pressure from lower tickets prices and greater competition during the second quarter of 2016.

This news comes less than a day after computer failures forced Southwest to cancel 920 flights on Wednesday and Thursday. 

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Southwest Airlines stock 7/21

SEE ALSO: RANKED: The 10 best cheap airlines in the world

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