LUV Q1 2024 Earnings

Call Details

• Call Title: Southwest Airlines Company Q1 2024 Earnings Call
• Date: April 25, 2024 at 4:30 PM UTC
• Management Team:
  • Julia Landrum (Vice President of Investor Relations)
  • Bob Jordan (President and Chief Executive Officer)
  • Tammy Romo (Executive Vice President and Chief Financial Officer)
  • Ryan Green (Executive Vice President and Chief Commercial Officer)
  • Andrew Watterson (Chief Operating Officer)

Call Summary

Financial Performance

• Southwest reported record first quarter operating revenue and record first quarter passengers carried, extending eight consecutive quarters of record top-line performance.
• Managed business revenue increased up 25% year over year in the first quarter and was roughly flat to 2019 levels.
• Unit revenue finished roughly flat on 11% capacity growth year over year in the first quarter.
• Non-fuel unit cost excluding special items increased up 5% year over year in the first quarter.
• Unit cost excluding special items (CASMX) for the first quarter increased by less than 1% year over year.
• The company returned $215M to shareholders via dividends in the quarter and ended Q1 with $10.5B in cash and short-term investments, a nearly $1B sequential reduction driven largely by labor agreement ratification payouts.

Demand & Capacity

• First quarter capacity finished up 11% year over year while completion factor averaged approximately 98.5% to 99% during the quarter.
• Second quarter capacity is now expected up in the range of 8% to 9% year over year.
• Third quarter capacity is expected to increase in the low single digits and fourth quarter capacity is expected to decrease in the low to mid single digits, placing full year 2024 capacity up approximately 4% year over year.
• The company closed four stations effective August 4 and materially reduced flights in Atlanta and Chicago O'Hare to address underperforming development markets.
• Network optimization delivered roughly $100M of incremental revenue in March from reductions to shoulder flying and short-haul flying.
• Planned near-term capacity growth will emphasize gauge and initiative-based flying, including modest red-eye flying and turn-time reductions, rather than aircraft-driven growth.