Southwest Airlines adjusted its second quarter guidance, lowering its revenue per available seat mile (RASM) to be down 4.0%-4.5% year-on-year (YoY). It had originally forecast its RASM to be down around 1.5%-3.5% YoY.
The airline maintained that its operational performance in the second quarter is ""strong"" with the RASM decline being driven mostly by ""complexities in adapting its revenue management to current booking patterns"" in the current environment.
""The company remains intensely focused on improving its financial results and creating value for its shareholders,"" the company read in its guidance, ""as it continues to develop and implement its portfolio of strategic initiatives aimed at enhancing the customer experience; delivering operational excellence; creating new and meaningful revenue opportunities; expanding margins; and achieving return on invested capital well above the company's weighted average cost of capital.""
In addition, its scheduled debt repayments forecast was up from $7 million to $9 million in its new guidance. Furthermore, its interest expense is expected to be $63 million in the second quarter rather than initial estimates of $62 million.
Its available seat miles (ASMs) guidance remains unchanged at a 8%-9% YoY increase. Economic fuel cost per gallon remains at $2.70-$2.80. Cost per available seat miles (CASM) excluding fuel, oil, special items, and profit sharing expenses also remains unchanged at a 6.5%-7.5% YoY increase.
Southwest will hold its investor day in September 2024, where it will share additional details of its upcoming second quarter results and will announce a review of its full plan.
Southwest adjusts second quarter guidance
