Travelers check in at Southwest Airlines at Hartsfield-Jackson Atlanta International Airport on June 28, 2024 in Atlanta, Georgia.
U.S. budget carrier Southwest Airlines’ fourth-quarter profit surpassed Wall Street estimates on Thursday, helped by robust travel demand and improved airfares.
The airline also forecast better-than-expected unit revenue (RASM), a proxy for pricing power, for the first quarter.
Airlines across the U.S. have cut seating to boost fares after a surplus capacity, introduced last summer in anticipation of a demand surge, forced airlines to offer discounts and sacrifice margins.
Airfares in December rose at their fastest pace in 21 months.
This helped Southwest report an adjusted profit of 56 cents per share for the fourth quarter ended Dec. 31, compared with analysts’ average estimate of 44 cents, according to data compiled by LSEG.
Its operating revenue rose 1.6% to $6.93 billion from a year earlier.
At its investor day in September, the airline unveiled plans including vacation packages and aircraft sale-leasebacks to enhance its revenue and liquidity, at a time when the industry struggles with inflated labor and aircraft maintenance expenses.
Southwest Airlines (LUV) Q4 earnings
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