Categories Analysis, Industrials
Southwest Airlines (LUV): A look at the plans the airline has outlined for the near term
Operating revenue for Q4 2022 is expected to increase 13-17% from Q4 2019
Shares of Southwest Airlines Co. (NYSE: LUV) were down 2% on Thursday. The stock has dropped 13% thus far this year. The airline industry continues to pick up momentum as travel trends continue to improve. Meanwhile, Southwest remains optimistic about its own outlook for the near term. Here’s a look at the plans it has laid out for this period:
Q4 2022
At its Investor Day earlier this month, Southwest laid out its fourth quarter 2022 outlook which remained largely unchanged except for fuel costs per gallon which are now expected to decline by $0.05 versus the previous guidance.
Operating revenue for Q4 2022 is expected to increase 13-17% from Q4 2019. The company is seeing strong leisure and business revenue trends in the fourth quarter and expects strong profits and margins. However, managed business revenues are still estimated to be down 20-25% from Q4 2019.
Capacity is expected to be down around 2% while non-fuel unit costs (CASM-X) is estimated to be up 14-18% compared to Q4 2019. Fuel costs per gallon are now projected to range between $3.10-3.20 versus the previous outlook of $3.15-3.25.
Q1 and FY2023
For the first quarter of 2023, Southwest expects capacity to be up approx. 10% compared to the same period in 2022. CASM-X is expected to be flat to up 2% versus Q1 2022 and fuel costs per gallon are estimated to range between $3.00-3.10.
Based on current bookings trends, the company expects to see strong leisure revenue in Q1 2023 along with a continued improvement in managed business revenue. CASM-X trends are expected to improve from the first half of 2023 to the second half. CASM-X is expected to decrease 4-6% year-over-year during 2H23.
For the full year of 2023, capacity is expected to be up approx. 15% compared to 2022. CASM-X is estimated to be down 1-3% from last year. Fuel costs per gallon are projected to come between $2.85-2.95. Southwest expects to have 841 aircraft in its fleet at the end of 2023. Capex is expected to range between $4.0-4.5 billion for the full year.
FY2022
In FY2022, Southwest expects capacity to be down approx. 4.5% from 2019. CASM-X is expected to be up 14-15% from 2019. Economic fuel costs per gallon are expected to be $3.05-3.15. Capex is estimated to be $4 billion. The company expects to have 768 aircraft in its fleet at the end of the year.
Click here to read the full transcript of Southwest Airlines’ Q3 2022 earnings conference call
Looking for more insights on the earnings results? Click here to access the full transcripts of the latest earnings conference calls!
Most Popular
CVX Earnings: Chevron reports lower revenue and profit for Q3 2024
Energy exploration company Chevron Corporation (NYSE: CVX) on Friday announced third-quarter 2024 financial results, reporting a decline in net profit and revenues. Net income attributable to Chevron Corporation dropped to
Key highlights from Exxon Mobil Corporation’s (XOM) Q3 2024 earnings results
Exxon Mobil Corporation (NYSE: XOM) reported its third quarter 2024 earnings results today. Total revenues and other income remained relatively flat at $90 billion compared to the same period a
AAPL Earnings: Apple Q4 2024 sales rise 6% YoY, beat estimates
Apple Inc. (NASDAQ: AAPL) reported an increase in revenues for the fourth quarter of 2024. The top line came in above estimates. The gadget giant generated revenues of $94.9 billion