In this article, Southwest Airlines and American Airlines have increased their fourth-quarter forecasts, attributing it to robust demand and higher ticket prices, which has led to a rise in the carriers’ stock prices.
Southwest mentioned in a regulatory filing that they anticipate a 5.5% to 7% increase in fourth-quarter unit revenue compared to the previous year, surpassing the initial forecast of no more than a 5.5% rise. The airline highlighted that their strategic network adjustments to eliminate unprofitable flights have been successful, and they foresee strong demand continuing into the following year.
Southwest expressed optimism about recent revenue trends, forward bookings, especially for holiday travel in the fourth quarter, and expects the positive revenue trends and effective tactical initiatives to extend into 2025.
Additionally, Southwest announced plans to finalize its first sale-leaseback of aircraft in the first quarter. On the other hand, American Airlines stated in a filing that they project unit revenue for the final quarter of the year to be on par or increase by up to 1% compared to the same period in 2023. This is a revision from the previous estimate of a potential 3% decline in unit revenue from the previous year. American also adjusted its earnings forecast to 55 to 75 cents per share, up from the earlier range of 25 to 50 cents per share.
Furthermore, American Airlines disclosed that they have selected Citi as their exclusive credit card provider, replacing Barclays in a highly anticipated agreement. Preceding this, JetBlue Airways raised its revenue projection for the quarter and informed employees of plans to further reduce unprofitable routes and make adjustments to its summer 2025 Europe schedule later in the week.
