Southwest Airlines Lowers Revenue Forecast, Shares React

Published 1 hours agoLUV

Southwest Airlines Lowers Revenue Forecast, Shares React

Southwest Airlines has warned investors of a deeper-than-expected decline in its revenue per available seat mile (RASM) for the second quarter. The airline now expects RASM to fall by 4% to 4.5% year-over-year, revising its previous projection of a 1.5% to 3.5% decrease. This adjustment reflects challenges in optimizing revenue management in line with current booking trends, as reported by NBC New York.

Despite the downward forecast revision, Southwest anticipates achieving a record quarterly operating revenue for the period, with its capacity slated to grow between 8% and 9% compared to last year. Nevertheless, the airline's shares took a hit in the pre-market trading, with a decline of over 3%, according to Proactive Investors.

The forecast adjustment has not gone unnoticed by investors. Elliott Management, an activist investor, has criticized Southwest's leadership and emphasized the need for substantial changes in the company’s management and business model. The broader airline industry is contending with challenges, notably as low-cost carriers like Southwest bear the brunt of decreased domestic travel demand, Reuters noted.

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Southwest Airlines Lowers Revenue Forecast, Shares React

Southwest Airlines Lowers Revenue Forecast, Shares React

Southwest Airlines has warned investors of a deeper-than-expected decline in its revenue per available seat mile (RASM) for the second quarter. The airline now expects RASM to fall by 4% to 4.5% year-over-year, revising its previous projection of a 1.5% to 3.5% decrease. This adjustment reflects challenges in optimizing revenue management in line with current booking trends, as reported by NBC New York. Despite the downward forecast revision, Southwest anticipates achieving a record quarterly operating revenue for the period, with its capacity slated to grow between 8% and 9% compared to last year. Nevertheless, the airline's shares took a hit in the pre-market trading, with a decline of over 3%, according to Proactive Investors. The forecast adjustment has not gone unnoticed by investors. Elliott Management, an activist investor, has criticized Southwest's leadership and emphasized the need for substantial changes in the company’s management and business model. The broader airline industry is contending with challenges, notably as low-cost carriers like Southwest bear the brunt of decreased domestic travel demand, Reuters noted.