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Southwest Airlines Gains on Impressive November Traffic
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Low-cost carrier Southwest Airlines Co. (LUV - Free Report) recently announced impressive traffic numbers for Nov 2016. The company saw revenue passenger miles or RPMs (a measure of air traffic) improving 7.2% on to 10.4 billion, while available seat miles or ASMs (a measure of capacity) grew 4.9% to 12.3 billion, both on a year-over-year basis.
Another important metric – load factor (percentage of seats filled by passengers) – improved 180 basis points (bps) to 85.1% during the month as traffic growth outpaced capacity expansion. Notably this is a record for the month of November.
In the first eleven months of 2016, Southwest Airlines reported 6.4% rise in RPMs to 114.4 billion and 5.8% increase in ASMs to 135.9 billion, both a year-over-year basis. The total load factor increased 50 bps to 84.2%.
The passenger count in November and at the end of the first eleven months of 2016 was up 6.6% and 5.6%, respectively.
The company’s stock was up 4.55% as a result of the commendable traffic figures.
We note that the stock has been performing well over the past few months and has comfortably outperformed the Zacks categorized Transportation-Airline industry over the last three months. The stock has gained over 28.61% compared with the industry, which has advanced just 12.55% over the same period.
RASM Guidance Maintained
Southwest has maintained its operating revenue per ASM (RASM) guidance for the fourth quarter of 2016. RASM is expected to decline in the range of 4%–5% from the fourth quarter of 2015.
The company faces intense competition from peers which such as Alaska Air Group (ALK - Free Report) , Delta Air Lines Inc. (DAL - Free Report) and Hawaiian Holdings Inc. (HA - Free Report) , all of which have posted increase in traffic, in November.
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Southwest Airlines Gains on Impressive November Traffic
Low-cost carrier Southwest Airlines Co. (LUV - Free Report) recently announced impressive traffic numbers for Nov 2016. The company saw revenue passenger miles or RPMs (a measure of air traffic) improving 7.2% on to 10.4 billion, while available seat miles or ASMs (a measure of capacity) grew 4.9% to 12.3 billion, both on a year-over-year basis.
Another important metric – load factor (percentage of seats filled by passengers) – improved 180 basis points (bps) to 85.1% during the month as traffic growth outpaced capacity expansion. Notably this is a record for the month of November.
In the first eleven months of 2016, Southwest Airlines reported 6.4% rise in RPMs to 114.4 billion and 5.8% increase in ASMs to 135.9 billion, both a year-over-year basis. The total load factor increased 50 bps to 84.2%.
The passenger count in November and at the end of the first eleven months of 2016 was up 6.6% and 5.6%, respectively.
The company’s stock was up 4.55% as a result of the commendable traffic figures.
We note that the stock has been performing well over the past few months and has comfortably outperformed the Zacks categorized Transportation-Airline industry over the last three months. The stock has gained over 28.61% compared with the industry, which has advanced just 12.55% over the same period.
RASM Guidance Maintained
Southwest has maintained its operating revenue per ASM (RASM) guidance for the fourth quarter of 2016. RASM is expected to decline in the range of 4%–5% from the fourth quarter of 2015.
The company faces intense competition from peers which such as Alaska Air Group (ALK - Free Report) , Delta Air Lines Inc. (DAL - Free Report) and Hawaiian Holdings Inc. (HA - Free Report) , all of which have posted increase in traffic, in November.
Zacks Rank
Southwest Airlines currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>