Monday, November 7, 2016

Southwest Reports October Traffic

Results are out for Southwest Airlines. This morning, the airline reported preliminary traffic statistics for October 2016.

In October, Southwest flew 10.5 billion revenue passenger miles (RPMs). RPMs are the number of miles traveled by an airline, multiplied by the number of revenue-paying passengers. October 2016 saw a 5.2 percent increase in RPMs, up from 10.0 billion RPMs in October 2015.

Available seat miles (ASMs) on Southwest in October 2016 increased 5.4 percent, from 11.6 billion in October 2015, to 12.2 billion. ASMs measure the capacity of the airlines, represented by the number of miles flown by the airline multiplied by the number of seats in an aircraft.

Load factor at Southwest declined in October 2016, from 85.9 percent in October 2015, to 85.7 percent. An airline’s load factor demonstrates the relationship between the number of seats with passengers and the total number of seats.

The October results weren’t entirely positive. Southwest announced that the airline expects its fourth quarter operating revenue per available seat mile (RASM) to decline between four to five percent, compared to its RASM in the fourth quarter of 2015.

In related news, stock analysts at Vetr downgraded Southwest from a Buy to a Hold. The analysts have a price target of $41.49 on the stock. Southwest opened at $41, up 1.5 percent from Friday’s close.

(Vanessa Page -Investopedia)

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