How Did Southwest Airlines Perform Operationally In August?
In the month of August 2016, the low cost carrier, Southwest Airlines, saw its capacity increase 4.6%. Including this month, so far in the year capacity is up as much as 5.9% for Southwest. Although this is higher than the legacy carriers who grew their capacity only marginally to deal with negative unit revenues, it is much lower than the likes of Alaska Air which grew its capacity by 10.3% in the month of August alone. Southwest’s passenger traffic increased by 3.6%, while the occupancy rate was down slightly to 84.6%. Further, the carrier has received approval from the Department of Transportation to launch flights to Havana. This may lead to the airline seeing more traffic and using its capacity more efficiently in the future.
However, the carrier continues to expect its unit revenues to remain in the negative territory. The management said that it expects PRASM to be down 3.5%-4.5% in the third quarter, of which 0.5% would be attributable to the company’s recent technology glitch episode.
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Have more questions about Southwest Airlines (NYSE:LUV)? See the links below:
- Why Trefis Revised Southwest’s Price Estimate From $46 To $38 Per Share
- Southwest Drops Post 2Q’16 Results As The Airline Restricts Its Capacity Growth For 2017-2018
- Southwest Q2’16 Earnings Preview: Capacity Growth To Partially Offset The Impact Of Declining PRASM
- How Will Different Capacity And Fuel Cost Forecasts Impact Southwest’s 2016 EBITDA?
- Rapid Capacity Additions And Lower Fuel Expense Drive Southwest’s 1Q’16 Earnings
- What Will Be The Impact On Southwest’s EBITDA, If Crude Oil Prices Rebound To $100 Per Barrel by 2018?
- Will Southwest’s International Operations Contribute A Significant Portion Of Its Revenue By 2020?
- What Will Be Southwest’s Value In 2020?
- What Factors Caused A Sharp Jump In Southwest’s 2015 Operating Margin?
- How Has Southwest’s Revenue And EBITDA Composition Changed Over The Last Five Years?
- Southwest Airlines: The Year 2015 In Review
- What Is Southwest’s Outlook For 2016?
- What Is Southwest’s Fundamental Value Based On 2016 Estimated Numbers?
- What Is Southwest’s Revenue And EBITDA Composition?
- How Has Southwest’s Revenue And EBITDA Grown Over The Last Five Years?
Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Southwest Airlines
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