Yahoo Finance Southwest Airlines (LUV) Lowers Q2 RASM View on Bookings Issue
Southwest Airlines Co. (LUV) has provided updated guidance for second-quarter 2024.
The company now expects its second-quarter revenue per available seat mile (RASM) to decline in the range of 4%-4.5% year over year, which marks a deterioration from the previous guidance of 1.5% to 3.5% decline. The downside in the RASM expectations was owing to the difficulties faced by LUV in adjusting its revenues to current booking patterns and consumer spending trends. Despite lowered expectations, LUV continues to anticipate quarterly records for operating revenues in second-quarter 2024.
Cost per available seat mile (CASM, excluding fuel, oil and profit-sharing expenses, and special items) is still anticipated to increase in the range of 6.5-7.5% in the second quarter from the comparable period in 2023. Economic fuel costs per gallon are still expected to be between $2.70 and $2.80.
Interest expense is now expected to be $63 million (prior view: $62 million) in the second quarter.
Capacity or available seat miles (ASMs) are still estimated to improve 8-9% from the year-ago reported figure.For third-quarter 2024, LUV anticipates capacity to increase in the low-single digits, and for the fourth quarter of 2024, LUV expects capacity to decrease in the low- to mid-single digits. For 2024, management has reaffirmed its capacity expectation to improve 4% on a year-over-year basis.
LUV’s solid operational performance so far is evident from its fewer cancelations. The completion factor quarter to date has averaged almost 99.5% amid challenging weather in Texas and Florida.
LUV, a Zacks Rank #3 (Hold) stock, is not the only airline company that has updated its second-quarter 2024 guidance. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
JetBlue Airways Corporation’s (JBLU) management stated that it expects lower costs and a softer revenue decline in the second quarter of 2024. JBLU now anticipates its second-quarter revenues to decline between 6.5% and 9.5% year over year, which marks an improvement from the previous guidance of 6.5%-10.5% decline. Capacity or available seat miles are now anticipated to decline in the 2-4% range. This marks an improvement over the prior forecast of a decline in the 2-5% band. JBLU now anticipates non-fuel unit costs to increase 5-7%, down from the prior expectation of a 5.5-7.5% increase. JetBlue now anticipates second-quarter 2024 average fuel cost per gallon in the range of $2.85-$2.95 (prior view: between $2.98 and $3.13).
American AirlinesAAL management trimmed its earnings per share outlook for second-quarter 2024. CEO Robert Isom stated that the softness pertaining to bookings was due to changes in the airline's sales strategy. Vasu Raja, AAL’s chief commercial officer, who was spearheading the new sales and distribution strategy, will step down in June.
American Airlines now expects adjusted earnings per share for the second quarter in the $1-$1.15 band (earlier guidance was in the $1.15-$1.45 range). Second-quarter total revenue per available seat miles is now expected to decline in the 5-6% band from the year-ago level (a dip of 1-3% was expected previously). System capacity (measured in available seat miles) is still estimated to increase in the 7-9% band from second-quarter 2023 actuals.
United Airlines UAL also featured in the news, courtesy of management’s decision to stick to the second-quarter earnings per share guidance provided with first-quarter 2024 results. United Airlines still expects second-quarter 2024 earnings per share to be in the $3.75-$4.25 band.
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