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Recent Changes in Southwest Load Factor

maxblast72

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The airlines August traffic reports came out this week, and I noticed that Southwest's load factor was down about 5% year over year. Looking over some other traffic releases over the past few months, July's traffic was down 5% year over year, while June's was down about 4% year over year.

Most other carrier's traffic numbers seem to be flat to slight negative (less than 1%) while Airtran's load factor grew 3% even with the 10% growth in ASM.

Is Southwest raising their fares that much that they are seeing a drop in demand? They don't appear to be growing that much to cause a drop in load factor. Have they found that load factors in the 80's strains their system too much and have set prices to get their load factor back into the middle 70's?
 

waveflyer

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i think it's mostly due to denver ... they're pleased, but load factor's arent' that high there yet.
 

airlinepilot

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You have to remember how much we have increased seat/load capacity over they last couple of years also.
 

JumpJetter

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Southwest flew 6.6 billion revenue passenger miles (RPMs) in August 2008, a 5.2 percent decrease from the 7.0 billion RPMs flown in August 2007. Available seat miles (ASMs) increased 1.5 percent to 8.9 billion from the August 2007 level of 8.7 billion. The load factor for the month was 74.6 percent, compared to 80.0 percent for the same period last year. In August 2008, our average length of haul was 855 miles, and we flew 101,433 trips.

Note that seat miles only increased 1.5% (that's the growth), but load factor is down about 5%, as are RPMs. Also note how the haul lengths are increasing. No reference given for that year over year, but I think it used to be quite a bit shorter than that.
I think that's why Gary Kelly has recently voiced concerns over growth. If growing the fleet isn't making you money....then why grow the fleet...:crying:
 

scoreboardII

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GK needs to wake up and smell the coffee, he's not running a small Texas airline anymore, he needs to aquire and expand or wither and die.
 

Tanker Clown

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Did they ever say if they were going to ask for LOAs in January or just cut back everyone's hours?
 

Jetjockey

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I would think that SWA has more price sensitive leisure travelers that are harder hit by a softening economy. I'm sure they have a large amount of business travelers, but not the same amount as a legacy like AA, UA, etc.

Just a guess, not meant as a bash on SWA.
 

ivauir

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Did they ever say if they were going to ask for LOAs in January or just cut back everyone's hours?

Cut back open time probably. Hours won't drop as muc as reported.
 

bravodude

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I think they said that the credit per line will drop 1tfp. (trip for pay)
 

GuppyWN

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Load factor dropped 5%. What did the YIELD do? Don't know yet. We raised ticket prices over 10 times last year. Wait till the earnings come out before you predict our demise.

Gup
 

maxblast72

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Not predicting Southwest demise. With the amount of cash on hand and unrealized gains from hedging activities, Southwest has way more time to adapt to anything that happens than anybody else. Just pointing out some industry trends and seeing what everyone's spin is.
 
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