Southwest Airlines (LUV) issues updated guidance

Southwest Airlines (NYSE: LUV) is providing updated guidance regarding selected financial trends. The Company's President, Chief Executive Officer, & Vice Chairman of the Board of Directors, Bob Jordan, will be presenting at the J.P. Morgan Industrials Conference today, March 11, 2025, at 11:15 a.m. Eastern Standard Time. A live webcast of the Company's 2025 J.P. Morgan Industrials Conference presentation is available on the Company's website at www.southwestairlinesinvestorrelations.com, in the Events and Presentations section under Upcoming Events. Likewise, a replay of the webcast will be made available following the conclusion of the live event. The slides used in conjunction with today's presentation are furnished herein as Exhibit 99.1 and are incorporated by reference into this Item 7.01.
The following table presents updated selected financial guidance for first quarter 2025. These projections are based on current booking trends and the Company's current outlook, and actual results could differ materially.

1Q2025 estimation Previous estimation
RASM (a), year-over-year Up 2% to 4% Up 5% to 7%
ASMs (b), year-over-year Down ~2% Down 2% to 3%
Fuel cost per gallon1 (c) $2.35 to $2.45 $2.50 to $2.60
Fuel hedging premium expense per gallon $0.07 No change
Fuel hedging cash settlement gains per gallon $— No change
ASMs per gallon (fuel efficiency) 82 to 83 81 to 83
CASM-X (d), year-over-year2
Up ~6% Up 7% to 9%
Scheduled debt repayments (millions) ~$5 No change
Interest expense (millions) ~$45 No change

(a) Operating revenue per available seat mile ("RASM" or "unit revenues").
(b) Available seat miles ("ASMs" or "capacity"). The Company continues to expect second quarter 2025 capacity to increase in the range of 1 percent to 2 percent, year-over-year.
(c) Based on the Company's existing fuel derivative contracts and market prices as of March 4, 2025.
(d) Operating expenses per available seat mile, excluding fuel and oil expense, special items, and profit sharing ("CASM-X").
The Company now expects first quarter 2025 RASM to increase in the range of 2 percent to 4 percent on capacity down approximately 2 percent, both on a year-over-year basis. Compared with the Company's previous estimation, roughly a point of the lower unit revenue guide is primarily due to higher-than-expected completion factor, less government travel, and a greater impact from the California wildfires than originally estimated. The remainder of the decrease is primarily attributable to softness in bookings and demand trends as the macro environment has weakened.
The Company now expects first quarter 2025 CASM-X to increase approximately 6 percent, compared with its previous estimate to increase in the range of 7 percent to 9 percent, both year-over-year, primarily due to increased capacity and lower than expected salary, wages, and benefits, maintenance, and other expenses—part of which was a shift to later in the year. The Company remains focused on driving efficiencies to offset overall inflationary cost pressures and achieve its cost initiative.

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