Southwest Airlines remains positive about 2016 as YE2015 discounting pressures unit revenues

After a massive push from Dallas Love Field that began in late 2014 and continued through 2015, much of Southwest's capacity growth in 2016 will stem from increased aircraft utilisation and the annualisation of an international push from Houston Hobby airport that occurred in late 2015.

The airline plans few new cities in 2016 as it works to shrink the number of new routes under development in order to continuing growing its revenues. Some unexpected discounting on competitive walk up fares in late 2015 triggered a revision of Southwest's unit revenue forecast for 4Q2015 from positive growth to a flat to negative 1% performance. But Southwest seems unconcerned over the revision, highlighting its projected record profitability for 2015.

Although Southwest has made a significant international push during the last couple of years, the airline maintains that most of its growth prospects remain in the domestic US market. The company believes much opportunity remains to connect the dots within its domestic network, and sees potential for a resurgence in some short haul flying.