Southwest now sees Q4 RASM down 9%-10% year-over-year

In a regulatory filing, Southwest Airlines is providing updated guidance regarding selected financial trends. The company now sees Q4 RASM, year-over-year, down 9% to 10% vs. a prior view of down 9% to 11%. The company still sees Q4 ASMs, year-over-year, to be up about 21%. The company still sees Q4 CASM-X, year-over-year, to be down 16% to 19%. The filing stated: “Fourth quarter 2023 travel demand and yields continue to be healthy. Leisure demand remains strong with record revenue over the Thanksgiving holiday period. Close-in bookings, including managed business bookings, have performed at the better end of expectations in November and December-to-date. As a result, the company now expects fourth quarter unit revenues to improve to the better end of its previous guidance range, and continues to expect record fourth quarter operating revenues and record fourth quarter passengers. The company’s expected ASM year-over-year growth range of 14 percent to 15 percent for full year 2023 remains unchanged. The company also continues to expect first quarter 2024 capacity to increase in the 10 percent to 12 percent range, and full year 2024 capacity to increase in the range of 6 percent to 8 percent, year-over-year. The annual goal for capacity beyond 2024 is now for low- to mid-single-digit year-over-year ASM growth with low-single-digit year-over-year trip growth. The planned capacity moderation, relative to the company’s previous goal of mid-single-digit year-over-year ASM growth, is to support the company’s long-term financial goal to deliver after-tax return on invested capital well above the weighted average cost of capital. The company’s fourth quarter 2023 CASM-X guidance range remains unchanged and is inclusive of market wage rate accruals for all open labor contracts related to the fourth quarter 2023 time period.”