Southwest Airlines Updates Guidance and Authorizes New $2.5 Billion Share Repurchase Program

Southwest Airlines Investor Day Announcement

Southwest Airlines Co. is hosting its 2024 Investor Day event today, September 26, 2024, at 10:30 a.m. Eastern Daylight Time. A live webcast of the presentation is available through the company’s investor relations platform, along with a replay that will be provided after the event concludes. The slides presented during the Investor Day will also be available as part of the event documentation.

In conjunction with the Investor Day, Southwest Airlines has announced the authorization of a new $2.5 billion share repurchase program by its Board of Directors. This new program replaces the previous plan authorized in May 2019. Under the new program, purchases may occur in open market or private transactions, based on management’s discretion, and may utilize various trading strategies, including 10b5-1 trading plans and accelerated share repurchase programs. Management reserves the right to discontinue purchases at any time.

The company is providing updated guidance on selected financial trends for the third quarter and full-year projections for 2024. The insights are based on current booking trends and expectations, although actual results may vary significantly.

Third Quarter and Full Year 2024 Financial Guidance:

• RASM (Operating Revenue per Available Seat Mile): Projected to increase by 2% to 3% year-over-year, up from an earlier forecast of being flat to down 2%.
• ASMs (Available Seat Miles): Anticipated growth of approximately 2%, up from no expected change previously.
• Economic Fuel Costs per Gallon: Expected to range from $2.50 to $2.60, revised from $2.60 to $2.70.
• Fuel Hedging Premium Expense per Gallon: Estimated at $0.07, unchanged from previous estimates.
• Fuel Hedging Cash Settlement Gains per Gallon: Expected to be $0.02, down from a previously estimated $0.04.
• CASM-X (Operating Expenses excluding Fuel): Anticipated increase of 11% to 13%.
• Scheduled Debt Repayments: Expected to be approximately $9 million, up from a previous estimate of $7 million.
• Interest Expense: Projected to be around $63 million, slightly up from an earlier estimate of $62 million.

For the full year 2024, the guidance includes:

• ASMs: Projected to increase by approximately 4%.
• Economic Fuel Costs: Estimated to range from $2.60 to $2.70.
• CASM-X: Expected to rise by 7% to 8% year-over-year.
• Scheduled Debt Repayments: Estimated at about $31 million for the year.
• Interest Expense: Anticipated to be near $253 million.

The company has confirmed that its flight schedule will be available for booking through June 4, 2025, and that it expects a capacity decrease of around 4% year-over-year for the fourth quarter of 2024.

Looking ahead, Southwest Airlines expects the third quarter 2024 RASM to increase due to stronger revenue performance influenced by a combination of factors, including recovering demand and enhanced revenue management techniques.

On September 26, 2024, a press release related to the Investor Day was issued, which is also included in the corporate disclosures.

Please note that financial projections are subject to uncertainties and may not always reflect future conditions accurately.