Southwest & Alaska Air: positive momentum in early 2019

Two of the US' lower cost airlines - Southwest and Alaska - posted solid unit revenue performances in 4Q2018 that will continue in 1Q2019, but the factors driving their respective outlooks are largely unique to each operator.

Aside from fairly solid underlying trends, Southwest is benefitting from the lapping of headwinds that pressured its unit revenue performance early in 2018, including a suboptimal flight schedule driven by Boeing 737 Classic retirements.

Alaska is reaping the benefits of revenue synergies from its merger with Virgin America and its own lower capacity growth in early 2019. The company is cautioning that there is some choppiness in close-in fares during early 2019, but is declaring that its revenue performance during 1Q2019 will outperform the industry.