LUV Q4 2024 Earnings

Call Details

• Call Title: Southwest Airlines Company Q4 2024 Earnings Call
• Date: January 30, 2025 at 5:30 PM UTC
• Management Team:
  • Julia Landrum (Vice President of Investor Relations)
  • Bob Jordan (President and CEO and Vice Chairman of the Board)
  • Andrew Watterson (Chief Operating Officer)
  • Ryan Green (Executive Vice President and Chief Transformation Officer)
  • Tammy Romo (Executive Vice President and Chief Financial Officer)
  • Whitney Eichinger (Chief Communications Officer)

Call Summary

Financial Performance

• Fourth quarter unit revenues were 8% higher than fourth quarter 2023.
• Nominal fourth quarter RASM was 7% higher sequentially relative to third quarter RASM.
• The company continues to expect to deliver or exceed the $1.0B 2025 EBIT contribution target from core business initiatives, excluding any fleet transaction benefits.
• The company still aims to deliver $1.5B of targeted total 2025 incremental EBIT from the Investor Day initiative portfolio including fleet monetization opportunities.
• Fourth quarter CASM X increased 11.1% year-over-year and full year 2024 CASM X increased 7.8% year-over-year, both inclusive of a $92M sell-leaseback gain in Q4 2024.
• Full year 2024 growth capital expenditures were $2.1B and full year 2024 net capital expenditures were $1.2B after $871M of sell-leaseback proceeds.
• The company returned $680M to shareholders in 2024, comprised of $430M in dividends and $250M of share repurchases.
• Routinely referenced non-GAAP metrics exclude special items and are reconciled in the press release and supplemental materials.

Guidance

• First quarter RASM is projected to be up in the range of 5% to 7% year-over-year.
• First quarter CASM X is expected to increase in the range of 7% to 9% year-over-year.
• The company expects to exit 2025 with fourth quarter year-over-year CASM X growth in the low single digits, excluding potential gains from future fleet sales or sell-leasebacks.
• 2025 growth capital spending is expected to be in the range of $2.5B to $3.0B, including approximately $1.2B of aircraft capital spending and $1.6B of non-aircraft capital spending.
• The company is planning capacity growth of 1% to 2% year-over-year in 2025 funded by efficiency initiatives.
• The company is planning around 38 Boeing deliveries for 2025 as a conservative planning assumption versus a contractual 2025 number of 136.
• The timing and magnitude of fleet monetization and net capex reductions remain dependent on Boeing delivery confidence and secondary market conditions.