Southwest's (LUV) Load Factor Declines Again In November
Zacks Investment Research | Dec 09, 2018 08:22PM ET
Southwest Airlines (NYSE:LUV) reported traffic results for November. Traffic (measured in revenue passenger miles or RPMs) increased 4.9% to around 11.33 billion while capacity or available seat miles (ASMs) expanded 6.5% to 13.4 billion.
However, load factor (percentage of seats filled by passengers) deteriorated 130 basis points (bps) to 84.5% in the month as capacity expansion outweighed traffic growth. Meanwhile, passenger count grew 3.2% to 14.01 billion.
In the first 11 months of 2018, Southwest witnessed a 3.3% rise in RPMs to 122.25 billion. Also, ASMs climbed 3.8% to 146.23 billion. As a result, load factor contracted 40 bps to 83.6%. However, passenger count rose 3.9% to 149.99 billion.
The carrier has been struggling with overcapacity woes of late. The low-cost airline is perhaps still reeling under the effects of the flight 1380 incident in April. Ever since the incident, the airline has recorded a drop in load factor every successive month. This persistent fall in load factor certainly does not bode well for the company as it signals low profitability prospects.
Southwest Airlines Co. Price
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