Southwest Airlines raises fourth-quarter unit revenue forecast on travel demand uptick
World
Southwest Airlines raises fourth-quarter unit revenue forecast on travel demand uptick
(Reuters) - Southwest Airlines on Thursday raised its forecast for fourth-quarter revenue per available seat miles, benefiting from improved pricing and a rebound in domestic travel demand.
Shares of the budget carrier rose about 2.5% before the bell.
Travel demand has seen a lift from the holiday season and after the U.S. presidential election.
Southwest said it was encouraged by recent revenue trends and forward bookings, and expects these to carry into 2025.
On Monday, the U.S. Transportation Security Administration said it screened the highest number of airline passengers ever on a single day at 3.08 million.
The carrier, however, has struggled to find its footing after the pandemic, in part due to Boeing's aircraft delivery delays and industry-wide overcapacity in the domestic market.
That prompted it to make a series of efforts over the past year to help reinvigorate demand, including partnerships, seats with more legroom for customers, and aircraft sale-leasebacks.
In October, the carrier announced it reached a deal with activist Elliott to put an end to a bitter months-long boardroom battle.
Southwest on Thursday added that it continues to see about 20 Boeing 737-8 jet deliveries this year, and expects to retire roughly 40 older 737 models from its fleet.
The carrier now expects its fourth-quarter RASM, a proxy for pricing power, to be up between 5.5% and 7%, compared with its prior expectation of between 3.5% and 5.5%.
Shell and Norway's Equinor will merge their British offshore oil and gas assets into an equal joint venture.
It also expects its economic fuel costs per gallon for the current quarter to fall in a range of $2.35 to $2.45, up from its previous guidance of $2.25 and $2.35.
