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Southwest Airlines expects revenue flat to down one percent

Staff writer |
Southwest Airlines expects a solid fourth quarter 2015 operating unit revenue performance of flat to down one percent as compared with fourth quarter 2014.

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This outlook also includes the approximate $130 million estimated fourth quarter 2015 effect from the company's July 2015 amended co-branded credit card agreement and the resulting change in accounting methodology.

Based on current cost trends, and excluding fuel and oil expense, profitsharing, and special items, the company currently expects its fourth quarter 2015 operating expenses per available seat mile (unit costs) to be flat to down one percent compared with fourth quarter 2014, and full year 2015 unit costs to decrease in the one to two percent range, compared with 2014.

Based on existing fuel derivative contracts and market prices as of December 8, 2015, fourth quarter 2015 economic fuel costs are estimated to be closer to the lower end of the $2.05 to $2.10 per gallon range, as compared with fourth quarter 2014's $2.62 per gallon.

The company continues to expect its full year 2015 available seat miles to increase approximately seven percent, year-over-year, and its 2016 capacity to increase in the five to six percent range, year-over-year.

The annualized impact of the company's 2015 expansion is expected to contribute the majority of 2016's year-over-year capacity growth.

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