- Southwest Airlines (NYSE:LUV) -4.1% premarket after lowering its outlook for Q1 revenue per available seat mile to be in-line with the year-ago quarter, vs. previous guidance of a 1%-2% increase.
- LUV says March Y/Y RASM trends for the non-peak travel periods have been below expectations "primarily due to the competitive fare environment that continues to pressure passenger revenue yields, and lower than expected travel demand due to the timing of spring break holidays."
- LUV also says a "sub-optimal [Q1] flight schedule driven by the retirement of its Boeing (NYSE:BA) 737-300 Classic fleet is also impacting passenger revenue yields and load factors," but it continues to expect Y/Y RASM growth in 2018.
- LUV "continues to be encouraged by cost trends" and now expects Q1 operating expenses per available seat mile to be flat to up 1% Y/Y compared with Q1 2017 CASM of 8.68 cents.
- Separately, LUV says it has recast certain 2016-17 financial information to reflect the adoption of new accounting rules but expects the impact to be "immaterial" to its Q1 RASM comparisons.
- Now read: Southwest Airlines: Best Choice Among Airlines Right Now
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