LUV Q4 2023 Earnings

Call Details

• Call Title: Southwest Airlines Company Q4 2023 Earnings Call
• Date: January 25, 2024 at 5:30 PM UTC
• Management Team:
  • Julia Landrum (Vice President of Investor Relations)
  • Bob Jordan (President and CEO)
  • Tammy Romo (Executive Vice President and CFO)
  • Ryan Green (Executive Vice President and Chief Commercial Officer)
  • Andrew Watterson (Chief Operating Officer)
  • Whitney Eichinger (Chief Communications Officer)

Call Summary

Financial Performance

• Fourth quarter 2023 operating revenue was just over $6.8B.
• Full year 2023 operating revenue grew nearly 10% year over year to a record $26B.
• Fourth quarter net income excluding special items was $233M and full-year profit excluding special items was $996M.
• Fourth quarter average jet fuel price was $3 per gallon and full-year fuel efficiency improved nearly 3% year over year.
• Completion factor was 99% for the full year and 99.6% in Q4, which was the best quarterly performance in more than a decade.
• Full year passengers, Rapid Rewards revenue, and ancillary revenue all set records in 2023.

Demand & Capacity

• Company expects full year 2024 capacity to be up about 6% year over year, and management stated this increase is carryover from 2023 network restoration with no net new additional 2024 capacity.
• Management stated Q1 capacity was highest and then planned deceleration across the year with roughly 10% in Q1, 8% to 10% in Q2, and 3% to 5% in Q3 as a roadmap for capacity pacing.
• About 60% of expected bookings for first quarter were already in place at the time of the call, which management described as slightly above normal.
• Close-in bookings strengthened in November and December and management reported no discernible booking impact from last year’s operational disruption during the holiday season.
• Company intends to slow hiring to be flat to down versus year-end 2023 headcount to support efficiency and lower structural costs.
• Management called out strong performance in destination markets including Hawaii, Phoenix, Orlando, and Las Vegas.