Southwest Airlines and American Airlines Raise Forecasts on Strong Demand and Higher Fares
Southwest Airlines and American Airlines have raised their fourth-quarter forecasts, citing strong demand and higher fares. Southwest Airlines expects its unit revenue to rise between 5.5% and 7% from last year, up from a previous forecast of an increase of no more than 5.5%. The airline attributed the growth to its network changes aimed at culling unprofitable flights, which are paying off, and solid demand into next year.
American Airlines also raised its forecast, expecting unit revenue in the last three months of the year to be on par to up as much as 1% over the same period of 2023. The airline also raised its adjusted earnings estimate to 55 cents to 75 cents a share, up from 25 cents to 50 cents a share.
Both airlines have been implementing cost-cutting measures and adjusting their networks to adapt to changing market conditions. Southwest Airlines has completed its first sale-leaseback of aircraft in the first quarter, while American Airlines has dropped Barclays as its credit-card provider and picked Citi as its sole credit-card provider.
JetBlue Airways also raised its revenue forecast for the quarter and announced plans to further cut unprofitable routes and make tweaks to its summer 2025 Europe schedule. The airline has been focusing on improving its operational efficiency and reducing costs to stay competitive in the market.