Southwest Airlines Q4 Profit Exceeds Expectations Amid Robust Travel Demand
LUV: -0.63%
Southwest Airlines (LUV) reported a stronger-than-expected fourth-quarter profit, driven by increased travel demand and improved airfares. The airline also projected better-than-anticipated unit revenue (RASM) for the first quarter.
US airlines have reduced seating to boost fares, resulting in higher airfares in December. Southwest's adjusted profit for the quarter ended December 31st reached 56 cents per share, surpassing analyst estimates of 44 cents.
Operating revenue increased by 1.6% to $6.93 billion. To enhance revenue and liquidity, Southwest plans to offer vacation packages and implement aircraft sale-leasebacks.
"Our initiatives are accelerating progress, supported by robust demand and industry conditions," said CEO Bob Jordan.
For the first quarter, Southwest anticipates RASM growth of 5% to 7%, exceeding analyst expectations of 2.62%. However, cost per available seat mile is predicted to rise 7% to 9% due to labor contract expenses.
Despite ongoing aircraft delivery delays from Boeing, Southwest plans to acquire 38 737 MAX 8 aircraft in 2025.