Southwest Airlines Issues Guidance

Southwest Airlines

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(RTTNews) - Southwest Airlines Co. (LUV) said it expects first quarter capacity to decrease in the range of 2 percent to 3 percent; second quarter 2025 capacity to increase in the range of 1 percent to 2 percent; and full year 2025 capacity to increase in the range of 1 percent to 2 percent, all year-over-year. The company continues to plan for annual capacity growth through 2027 in the 1 percent to 2 percent range, year-over-year.

Southwest expects first quarter RASM to increase in the range of 5 percent to 7 percent, year-over-year. The company currently expects first quarter CASM-X to increase in the range of 7 percent to 9 percent, year-over-year.

Fourth quarter net income was $261 million compared to a loss of $252 million, prior year. Net income per share was $0.42 compared to a loss of $0.42. Adjusted net income increased to $356 million from $237 million. Net income per share, excluding special items, was $0.56 compared to $0.38. Operating revenues were $6.9 billion, a 1.6 percent increase, year-over-year. Fourth quarter capacity decreased 4.4 percent.

Southwest Airlines ended 2024 with 803 aircraft, which reflected 36 aircraft retirements, compared with its previous guidance of 40 retirements, due to shifting retirements into 2025. The company is currently using a planning assumption of 38 -8 aircraft deliveries in 2025.

Southwest Airlines estimates 2025 capital spending to be in the range of $2.5 billion to $3.0 billion. This includes approximately $1.2 billion in aircraft capital spending, based on the planning assumption of 38 -8 deliveries, and $1.6 billion in non-aircraft capital spending.

Southwest ended 2024 with $8.7 billion in cash and cash equivalents and short-term investments, and a fully available revolving credit line of $1.0 billion. The company plans to launch an additional $750 million accelerated share repurchase program in first quarter 2025.

Southwest noted that it is urgently working to accelerate and exceed the $500 million cost initiative announced at 2024 Investor Day to help mitigate cost inflation by minimizing hiring, optimizing scheduling efficiency, capitalizing on supply chain opportunities, and aggressively improving corporate overhead.

Shares of Southwest Airlines are down 2% in pre-market trade on Thursday.

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