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Southwest (LUV) Raises Q2 Load Factor View, Sees Solid Bookings

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Southwest Airlines LUV has raised its load factor (percentage of seats filled with passengers) guidance for the second quarter as it experiences strong bookings for the summer.

Per an investor update, LUV now anticipates load factor in the range of 85-87% in the second quarter compared with the previous expectation of 85%. The company maintains its expectations for second-quarter operating revenues, capacity, economic fuel costs per gallon and non-fuel unit costs.

Operating revenues are still estimated to increase 12-15% in the second quarter from the 2019 level. Capacity is expected to decline approximately 7% from the 2019 level. Economic fuel cost per gallon is estimated to be $3.30-$3.40. Non-fuel unit costs are expected to increase 14-18% from the comparable period in 2019.

Southwest Airlines Co. Price

Southwest Airlines Co. Price
Southwest Airlines Co. Price

Southwest Airlines Co. price | Southwest Airlines Co. Quote


Southwest witnessed strong revenues in April and May, with the strength continuing into June. While the company’s managed business revenues are improving, it was still down approximately 31% and 23% in April and May from their 2019 levels. LUV expects second-quarter managed business revenues to decline 20-25% from the 2019 level.

Southwest still expects capacity in the second half to be nearly flat compared with the 2019 level and full-year capacity to decline around 4% from the 2019 level. The airline continues to expect strong profits (excluding special items) for the remaining quarters of 2022 and the full year.

Zacks Rank & Other Key Picks

Southwest sports a Zacks Rank #1 (Strong Buy).

Some other stocks within the broader Transportation sector that investors can consider are as follows:

Star Bulk Carriers SBLK flaunts a Zacks Rank #1. The company's earnings have surpassed the Zacks Consensus Estimate in three of the preceding four quarters and missed once, the average surprise being 7.1%. You can see the complete list of today's Zacks #1 stocks here.

Shares of Star Bulk have gained more than 18% in a year.

Golar LNG Limited GLNG carries a Zacks Rank #2 (Buy). The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the preceding four quarters and missed once, the average surprise being 42.1%.

Shares of Golar LNG have rallied more than 72% in a year.


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