16-Feb-2017 8:29 AM

Southwest expects RASM to fall slightly, sees 'continued and sequential improvement' over 4Q2016

Southwest Airlines EVP and CFO Tammy Rommo stated (15-Feb-2017) the carrier expects operating revenue per available seat mile (RASM) to continue to fall slightly below 2016 levels in 1Q2017, with guidance to remain unchanged in the flat to down 1% region. Ms Romo noted this represents a continued and sequential improvement from the 2.9% RASM year-on-year decline in 4Q2016, which "is an encouraging start to the year." Southwest continues to expect 1Q2017 unit costs to increase in the 6% to 7% range, while 2017 unit costs are expected to increase by 3%. The carrier continues to expect FY2017 available seat miles to increase approximately 3.5%, with approximately 2.5 points related to domestic growth. Wage rate increases from amended union contracts are projected to drive approximately four points of 1Q2017 unit cost outlook and approximately three points of 2017 unit cost outlook. Southwest continues to estimate 2017 capital expenditures will be approximately USD2.3 billion and expects capital expenditures in 2018 to fall below 2017 levels. [more - original PR]

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