How Did Southwest Perform Operationally In January?
After an impressive fourth quarter, Southwest continued to showcase improvement in its January metrics. Keeping with the trends seen in the previous year, the company grew its capacity by 6.2% y-o-y in January, one of the highest in the industry. However, this is slightly higher given the company’s full year and first quarter guidance. Furthermore, the occupancy rate deteriorated in January by 120 bps, indicating a sign of excess capacity. In contrast, passenger traffic and passengers boarded grew at a solid pace of 4.6% and 3.7%, respectively in January 2017. In terms of unit revenue, the company expects the decline to be more gradual in Q1’17, as the headwinds relating to yields reduce.
Have more questions about Southwest Airlines (NYSE:LUV)? See the links below:
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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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