Southwest Airlines bookings have ‘performed at the better end of expectations in November and December-to-date,’ notes the American carrier in a Securities and Exchange Commission filing, adding that it now expects fourth quarter unit revenues ‘to improve to the better end of its previous guidance range’.
Estimated total available seat miles in Q4 2023 are up around 21% year-over-year, and crucially, revenue per available seat mile is now down 9% to 10% year-on-year in Q4 (vs a prior outlook for -9% to -11%). Costs per available seat mile are anticipated to be down 16% to 19% during the quarter.
Additionally, full year capacity for 2024 is expected to increase in the range of 6% to 8%, with the longer-term goal now a growth marked by low- to mid-single digit year-over-year available seat miles. This planned capacity moderation is intended to support Southwest’s ‘long-term financial goal to deliver after-tax return on invested capital well above the weighted average cost of capital’.
Southwest’s interest expense and scheduled debt repayments remain unchanged from previous estimations, at $63 million and $7 million respectively.