Southwest Airlines lowers revenue forecast | Wilnesh News

Southwest Airlines The airline fell about 4% in premarket trading Wednesday after the airline lowered its second-quarter revenue forecast, citing changes in booking patterns.

Southwest expects second-quarter revenue per available seat mile (the revenue an airline brings in per seat per mile flown) to fall 4% to 4.5% from last year, after previously forecasting a decline of 1.5% to 3.5%.

The company also said its unit expenses, excluding fuel, would rise up to 7.5% from a year earlier, having previously expected no change.

The company said its capacity would increase by up to 9%, rather than the previously expected flat growth in flight volumes.

Southwest still expects record quarterly operating income in the second quarter.

Airlines are seeing record passenger numbers, but rising costs and capacity growth are putting pressure on fares and profits.

“The expected decrease in the company’s RASM (revenue per available seat mile) is primarily due to the complexity of adjusting its revenue management to current booking models in this dynamic environment,” Southwest said in a statement. Archive.

Other businesses such as delta and UnityAirlines, meanwhile, have been relishing the return of passengers to international travel and are investing heavily in making travelers willing to pay more for roomier seats.

Southwest Airlines is facing activist investor pressure from hedge fund Elliott Management to replace CEO Bob Jordan and Chairman Gary Kelly, says The company was underperforming and needed to replace its top brass.

The Dallas-based airline expressed confidence in its leadership and reiterated that it is considering revenue initiatives such as seat assignments or premium seating, which would be a dramatic change to a simple business model that has been profitable for much of the past five years.

“We will adjust as customer needs change,” Jordan said at an industry event hosted by Politico earlier this month.