In This Article:
-
Unit Revenue Improvement: Fourth quarter unit revenues increased by 8% year-over-year.
-
RASM Growth: Fourth quarter RASM was up 8% year-over-year, exceeding prior guidance.
-
CASM-X Increase: Fourth quarter CASM-X increased 11.1% year-over-year; full year 2024 CASM-X increased 7.8% year-over-year.
-
Aircraft Deliveries: Closed out 2024 with 22 aircraft deliveries, in line with internal estimates.
-
Capacity Growth: Modest capacity plan of 1% to 2% year-over-year growth for 2025.
-
Fleet Retirement: Planning to retire 51 aircraft in 2025.
-
Capital Expenditures: Full year 2024 gross capital expenditures were $2.1 billion; net capital expenditures were $1.2 billion.
-
Shareholder Returns: Returned $680 million to shareholders in 2024, including $430 million in dividends and $250 million in share repurchases.
-
Share Repurchase Authorization: Planning for an additional $750 million ASR program later this quarter.
Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Southwest Airlines Co (NYSE:LUV) achieved an industry-leading completion factor with less than 1% of flights canceled during the year.
-
Fourth quarter RASM was up 8% year-over-year, exceeding prior guidance and demonstrating strong revenue performance.
-
The company has made significant progress on its Southwest Even Better plan, which includes strategic initiatives to boost efficiency and lower costs.
-
Southwest Airlines Co (NYSE:LUV) has signed its first commercial agreement with Iceland Air, expanding its network and customer travel options.
-
The company is committed to maintaining a strong balance sheet and has an investment-grade rating from all three rating agencies.
Negative Points
-
Southwest Airlines Co (NYSE:LUV) is experiencing above-normal unit cost inflation, particularly in market-driven wage rates, airport costs, and healthcare.
-
The company has a conservative assumption of 38 aircraft deliveries for 2025, which is significantly lower than the contractual number of 136, indicating potential operational risks.
-
There is pressure from supply-demand imbalance in the first half of 2024, although capacity moderation is expected to improve the situation.
-
Southwest Airlines Co (NYSE:LUV) is facing challenges in managing corporate overhead, which has grown at a faster rate than the rest of the airline.
-
The company is urgently working towards implementing a $500 million cost initiative to mitigate cost inflation, indicating ongoing financial pressures.