Southwest Airlines (LUV) July Traffic Up, Load Factor Falls

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Southwest Airlines Co.LUV reported mixed traffic numbers for July 2018. Traffic (measured in revenue passenger miles or RPMs) rose 2.1% to around 12.62 billion and capacity or available seat miles (ASMs) increased 3.2% to 14.62 billion.

However, load factor (percentage of seats filled by passengers) declined 100 basis points (bps) to 86.3% in the month as traffic growth was outpaced by capacity expansion. Additionally, passenger count grew 2.1% to 14,961,408.

In the first seven months of 2018, Southwest Airlines witnessed a 2.8% rise in RPMs to 78.2 billion. Also ASMs rose 2.7% to 93.48 billion. As a result, the load factor increased 10 bps to 83.7%.

The low-cost carrier, which is still reeling under the effects of the Flight 1380 incident in April, anticipates third-quarter revenue per available seat mile (RASM) between down 1% to up 1%. Moreover, the company expects operating expenses per available seat mile (CASM), excluding fuel and oil as well as profit-sharing expenses, to rise 2-3%. Additionally, third-quarter fuel costs are assumed at approximately $2.25 per gallon.

Southwest Airlines Co. Price

Southwest Airlines Co. Price | Southwest Airlines Co. Quote

Zacks Rank & Key Picks

Southwest Airlines carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation Sector are SkyWest, Inc SKYW , Old Dominion Freight Line, Inc ODFL and GATX Corporation GATX . While GATX carries a Zacks Rank #2 (Buy), SkyWest and Old Dominion sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Shares of SkyWest, Old Dominion and GATX have gained 63.9%, 51.6% and 35.7%, respectively, in a year's time.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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