Southwest Airlines stock slips as airline cuts Q2 unit revenue outlook

Shares in Southwest Airlines (NYSE: LUV) fell in premarket trading Wednesday after the carrier lowered its Q2 forecast for revenue per available seat mile (RASM), a key measure of pricing power, amid uneven travel demand.

The Dallas-based airline now expects current quarter RASM to decline by 4% to 4.5%, compared to its previous estimate of a 1.5% to 3.5% drop. Southwest said the adjustment is primarily driven by complexities in adapting its revenue management to current booking patterns in a dynamic environment.

Despite these lowered expectations, Southwest continues to anticipate "record operating revenue" for the second quarter. Moreover, the airline has reaffirmed its fuel cost forecast, expecting costs to range between $2.70 and $2.80 per gallon.

Operational performance in the second quarter has been strong, with minimal cancellations reported, Southwest added.

Looking ahead, the company projects a low-single-digit capacity increase for the third quarter, a low- to mid-single-digit decrease for the fourth quarter, and an overall capacity increase of approximately 4% for the full year.

By Vahid Karaahmetovic

You May Also Be Interested In

• Ghalibaf in message posted on his Telegram: we will turn the naval blockade into another defeat for the 'enemy'
• Increasing unusual option volume: AVTR OPTU LASE NASA VLN ACLS
• Oracle (ORCL) call put ratio 2.1 calls to 1 put into quarter results