Kevin Dietsch/Getty Images News
Southwest Airlines (NYSE:LUV) disclosed in a SEC filing that Q4 travel demand and yields continue to be healthy. The carrier noted that leisure demand remains strong with record revenue churned up over the Thanksgiving holiday period.
“Close-in bookings, including managed business bookings, have performed at the better end of expectations in November and December-to-date. As a result, the Company now expects fourth quarter unit revenues to improve to the better end of its previous guidance range, and continues to expect record fourth quarter operating revenues and record fourth quarter passengers.”
Specifically, Southwest Airlines (LUV) now sees revenue per available seat mile being down 9% to 10% year-over-year in Q4 vs. a prior outlook for -9% to -11%. Available seat miles are expected to be 21% higher against the soft comparable to a year ago when Southwest had a devastating operational meltdown around the holidays. Cost per available seat mile are anticipated to be down 16% to 19% during the quarter. Southwest Airlines (LUV) continues to expect Q1 of 2024 capacity to increase in the 10% to 12% range, and full year 2024 capacity to increase in the range of 6% to 8%. LUV said the annual goal for capacity beyond 2024 is now for low- to mid-single-digit year-over-year ASM growth with low-single-digit year-over-year trip growth. The planned capacity moderation was noted to support LUV’s long-term financial goal to deliver after-tax return on invested capital well above the weighted average cost of capital.
Shares of Southwest Airlines (LUV) were down 1.65% in premarket trading on Wednesday.