Southwest Airlines CompanyLUV reported impressive traffic results for March. Traffic (measured in revenue passenger miles or RPMs) rose 3.7% to around 11.72 billion while capacity or available seat miles (ASMs) expanded 2.4% to 13.76 billion.
Load factor (percentage of seats filled by passengers) improved 100 basis points (bps) to 85.1% in the month as traffic growth outpaced capacity expansion. Additionally, passenger count grew 5.3% to 14.32 billion.
In the first three months of 2018, Southwest Airlines witnessed a 3.7% rise in RPMs to 30.44 billion. Also, ASMs inched up 1.8% to 37.37 billion. As a result, the load factor increased 160 bps to 81.5%. Moreover, passenger count increased 5.5% to 37.54 billion on a year-to-date basis.
Southwest Airlines Co. Price
The low-cost carrier anticipates first-quarter revenue per available seat mile (RASM) to be flat year over year. While it estimates operating expenses per available seat mile (CASM) excluding fuel and oil expense plus profit-sharing expense to nudge up 0-1%. Additionally, first-quarter fuel costs are assumed at approximately $2.10 per gallon.
The company is scheduled to report first-quarter 2018 results on Apr 26.
Zacks Rank & Key Picks
Southwest Airlines carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the airline space are Cathay Pacific Airways Ltd. CPCAY , SkyWest, Inc. SKYW and United Continental Holdings, Inc. UAL , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Shares of Cathay Pacific Airways, SkyWest and United Continental have gained 11.5%, 19.7% and 1.3%, respectively, in the last six months.
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