How Did Southwest Perform Operationally In February?

Keeping with the industry trend, Southwest showcased lukewarm performance in its February metrics. The company grew its capacity by 1.2% y-o-y in February, bringing the year to date capacity up 3.8%. Furthermore, the occupancy rate stayed flat in February. In contrast, passenger traffic and passengers boarded grew at a moderate pace of 1.1% and o.7%, respectively. The company attributes this to an unexpected weakness in the close-in yields in the month from loss in traffic due to heavy rainfall in California, which have pushed forward to March. This has also caused the company to revise its unit revenue guidance for Q1’17 from flat to a drop of 2% to 3%. Another headwind for March is the snow storm being seen in the U.S., which has led to a number of cancellations and delays.

Have more questions about Southwest Airlines (NYSE:LUV)? See the links below:

• Increasing Costs At Southwest Airlines And What They Mean For The Carrier
• Southwest Faces Market Heat As It Reports Disappointing Q3’16 Results; Future Guidance Bleak
• Will International Expansion Be A Big Part Of Southwest’s Future Growth Strategy?
• What Are The Factors That Have Strengthened Southwest’s Domestic Presence?
• Has Southwest Been Able To Provide Meaningful Returns To Its Investors?
• How Has Southwest’s Cost Efficiency Improved?

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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