Southwest Airlines (LUV) Provides Guidance Update

Southwest Airlines (NYSE: LUV):

The Company now expects fourth quarter 2024 unit revenues to increase in the range of 5.5 percent to 7.0 percent on a year-over-year basis, with capacity down approximately 4 percent, also on a year-over-year basis. The strong year-over-year unit revenue growth is driven by resilient travel demand along with the realization of benefits from the Company’s execution of tactical actions. Tactical actions include improving network optimization and capacity rationalization, marketing and distribution evolution, and continued efforts to advance revenue management techniques. The improvement in expectations relative to the previous fourth quarter 2024 unit revenue guidance range is driven by the combination of better than expected leisure travel demand and faster than expected benefits from actions taken to mature the Company's revenue management techniques and better optimize the booking curve. 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. This outlook supports the Company's confidence in the 'Southwest. Even Better.' plan, which was unveiled at Investor Day in September 2024.

Further, the Company is actively pursuing its fleet strategy, also announced at Investor Day 2024, and currently expects to complete an initial transaction by early 2025. This strategy is designed to realize value from the Company's current fleet and order book through aircraft sales and sale-leaseback transactions. The Company continues to plan for a balanced capital allocation approach utilizing funds generated from its fleet strategy, as well as excess cash from the balance sheet, to offset future capital expenditures, reduce outstanding debt obligations, and provide Shareholder returns. As such, the Company currently intends to launch an additional $750 million accelerated share repurchase ("ASR") program in first quarter 2025, following the completion of the $250 million ASR announced in October 2024. Subsequent to the launch of the $750 million ASR program, the Company will have $1.5 billion remaining under its $2.5 billion share repurchase program authorized by the Company's Board of Directors in September 2024.

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