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Before the JP Morgan Industrial Conference, Southwest Airlines (New York Stock Exchange:LUV) has updated its outlook for 1Q23 and FY2023.
In 1Q2023, operating income is expected to increase 21-23% compared to the previous 20-24%, and business continues to anticipate a negative revenue effect in the range of $300 million to $350 million.
For the quarter, CASM-X is expected to increase between 5.5% and 6.5% Y/Y compared to the previous estimate of an increase between 2% and 4% Y/Y, while for the year CASM-X is expected to fall between 3.5% and 5.5% versus the previous estimate of a decrease between 6% and 8%.
The airlines anticipate an increase in capacity of between 15% and 16%, below their previous projection of between 16% and 17% for the year.
Based on fewer projected aircraft deliveries, the business anticipates that the decrease in capital expenditures for aircraft would more than offset the increase in capital expenditures for other aircraft, resulting in a lower estimated total capital expenditure in the whole year 2023.
Airlines now expect their fiscal 2023 capital spending to be approximately $4 billion, down from a previous estimate of $4 billion to $4.5 billion. Full-year aircraft and non-aircraft capital spending is expected to be $2.8 billion and $1.2 billion, respectively.
Excluding extraordinary items, the company continues to forecast a net loss for the quarter and, barring significant unforeseen events and based on existing trends, a healthy profit for fiscal 2023.
“Looking ahead, and based on current trends, bookings for the second quarter of 2023 look strong and in line with expectations.”
share 1.6% in the pre-market session on Tuesday.
Meanwhile, Delta Peers (DAL) reaffirmed its first-quarter outlook and Alaska Airlines (ALK) lowered its margin forecast for the quarter.
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