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22-Oct-2010 2:09 PM

Southwest Airlines expects momentum to continue for next two quarters

Southwest Airlines CEO, Gary Kelly, forecast the carrier would continue to show revenue growth in 4Q2010 and has momentum building up for year-on-year improvement 1Q2011. CFO Laura Wright stated that while bookings for the remainder of Oct-2010, as well as Nov-2010 and Dec-2010, “look strong”, the carrier’s year-on-year comparisons for Nov-2010 and Dec-2010 may be more difficult due to its CASM acceleration last year (Seeking Alpha, 21-Oct-2010). She added the carrier may have more difficult year-on-year capacity comparisons for 4Q2010. However, the CFO noted Southwest’s bookings, price and sequential revenue trends for Oct-2010 so far “indicate sustained momentum of our year-to-date revenue results”. Southwest expects another year-on-year increase in revenues for 4Q2010, but at a lower rate to 3Q2010, as the carrier reported USD24 million in ancillary revenue in 4Q2009 versus USD12 million in 3Q2009 for the same initiatives.