Southwest lifts Q4 revenue outlook amid robust demand trends, shares rise

Investing.com -- Southwest Airlines (NYSE:LUV) revised its fourth-quarter revenue per available seat mile (RASM) forecast upward on Thursday, citing stronger pricing and a resurgence in domestic travel demand.

The company’s shares climbed nearly 2% in premarket trading Thursday.

“The company is encouraged by recent revenue trends and forward bookings, including fourth quarter holiday travel, and currently expects strong revenue trends and tactical initiative performance to carry into 2025,” Southwest said in a statement.

Southwest also reaffirmed plans for its fleet, expecting about 20 new Boeing (NYSE:BA) 737-8 jets to be delivered this year while retiring approximately 40 older 737 aircraft.

The airline now anticipates fourth-quarter RASM to increase between 5.5% and 7%, an improvement from its earlier estimate of 3.5% to 5.5%.

Additionally, Southwest raised its guidance for economic fuel costs, projecting a range of $2.35 to $2.45 per gallon, compared with the previous range of $2.25 to $2.35.

Also, the company said it plans to launch a $750 million accelerated share repurchase (ASR) program in Q1 2025, following the completion of a $250 million ASR announced in October 2024.

After this, $1.5 billion will remain under the $2.5 billion repurchase program approved by the board in September 2024.