Southwest Airlines Co. cut its outlook for first-quarter revenue per available seat mile (RASM) to be in line with a year ago from previous guidance of a 1% to 2% increase, primarily because the competitive fair environment continues to pressure passenger revenue yields and lower-than-anticipated travel demand from the timing of the spring-break holidays. the stock slipped 0.6% in light premarket trade Wednesday. The air carrier said the “sub-optimal” flight schedule resulting from the retirement of its Boeing 737-300 classic fleet also hurt passenger revenue yields and load factors. The cost outlook has improved, as the company now expects first-quarter operating expenses per available seat mile (CASM) to be flat to up 1% and fuel costs to be about $2.10 per gallon. In January, Southwest said it expected unit costs, excluding fuel and oil expense and special items, to rise 0.5% to 1.5% and fuel costs of $2.10 to $2.15 per gallon. Separately, Southwest said it has recast certain 2016 and 2017 financial information to reflect the adoption of new accounting rules, but said it expects the impact of the new revenue standard to be “immaterial” to its first-quarter RASM comparisons. The stock has shed 8.1% over the past three months through Tuesday, while the NYSE Arca Airline Index has gained 2.6% and the S&P 500 has tacked on 1.2%.
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