Southwest Airlines (NYSE:)

Southwest Airlines Co. (the “Company”) is providing updated guidance regarding selected financial trends.

The following table presents updated selected financial guidance for second quarter 2024. These projections are based on current booking trends and the Company’s current outlook, and actual results could differ materially.

2Q 2024 Estimation Previous estimation
RASM (a), year-over-year Down 4.0% to 4.5% Down 1.5% to 3.5%
ASMs (b), year-over-year Up 8% to 9% No change
Economic fuel costs per gallon1 (c) $2.70 to $2.80 No change

CASM-X (d), year-over-year2

Up 6.5% to 7.5% No change
Scheduled debt repayments (millions) (e) ~$9 ~$7
Interest expense (millions) ~$63 ~$62

(a) Operating revenue per available seat mile (“RASM” or “unit revenues”).

(b) Available seat miles (“ASMs” or “capacity”). The Company’s flight schedule is currently published for sale through March 5, 2025. The Company continues to expect third quarter 2024 capacity to increase in the low-single digits; fourth quarter 2024 capacity to decrease in the low- to mid-single digits; and full year 2024 capacity to increase approximately 4 percent, all on a year-over-year percentage basis.

(c) Based on the Company’s existing fuel derivative contracts and market prices as of June 20, 2024. Includes fuel taxes and fuel hedging premium expense of $0.07 per gallon and favorable cash settlements from fuel derivative contracts of $0.04 per gallon.

(d) Operating expenses per available seat mile, excluding fuel and oil expense, special items, and profitsharing (“CASM-X”). Guidance based on the revised second quarter 2023 CASM-X of 10.85 cents provided in the Company’s third quarter 2023 10-Q filed on October 30, 2023.

(e) The Company returned two aircraft leases earlier than originally planned, which shifted payments forward from the previous monthly payments scheduled later in the year.

The Company’s second quarter 2024 operational performance, thus far, continues to be strong with minimal cancellations. Completion factor quarter-to-date has averaged approximately 99.5 percent despite challenging weather in Texas and Florida.

Based on revenue performance to date, the Company now expects second quarter 2024 RASM to decline in the 4.0 percent to 4.5 percent range compared with its prior expectation of a 1.5 percent to 3.5 percent decline, both on a year-over-year basis. The reduction in the Company’s RASM expectations was driven primarily by complexities in adapting its revenue management to current booking patterns in this dynamic environment. Despite lowered expectations, the Company continues to expect an all-time quarterly record for operating revenue in second quarter 2024.

The Company remains intensely focused on improving its financial results and creating value for its Shareholders as it continues to develop and implement its portfolio of strategic initiatives aimed at enhancing the Customer Experience; delivering operational excellence; creating new and meaningful revenue opportunities; expanding margins; and achieving return on invested capital well above the Company’s weighted average cost of capital. The


Company plans to share additional details with its upcoming second quarter 2024 financial results and has announced a review of its full plan at Investor Day in September 2024.

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