Another important metric – load factor (percentage of seats filled by passengers) – deteriorated 40 basis points (bps) to 82.6% during the month as capacity expansion outpaced traffic growth.
For full-year 2016, Southwest Airlines reported a 6.2% rise in RPMs to 124.80 billion and a 5.7% increase in ASMs to 148.52 billion, both a year-over-year basis. Total load factor increased 40 bps to 84%.
The passenger count in December and at the end of the year grew 4.5% and 5.5%, respectively.
We note that the company’s stock has comfortably outperformed the Zacks categorized Transportation-Airline industry over the last three months. The stock has gained over 28.32% compared with the industry, which has advanced just 19.42% over the same period.
RASM Guidance Improved
Southwest Airlines has revised its operating revenue per ASM (RASM) guidance for the fourth quarter of 2016. RASM is now expected to decline in the range of 3–4% from the fourth quarter of 2015. The earlier guidance had estimated a decline in the range of 4% to 5%. The improvement in outlook is due to better close-in yields and traffic results for December.
This apart, Southwest Airlines announced that it has appointed Thomas M. Nealon as its President and Michael G. Van de Ven as its Chief Operating Officer, effective immediately.
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