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Southwest Airlines reports February traffic

Southwest Airlines flew 8.7 billion revenue passenger miles (RPMs) in February 2017 , an increase of 1.1 percent from the 8.6 billion RPMs flown in February 2016. Available seat miles (ASMs) increase d 1.2 percent to 11.0 billion in February 2017, compared with February 2016 ASMs of 10.9 billion.

The February 2017 load factor was 79.0 percent, which was flat compared with February 2016. Based on these results and current trends, Southwest now estimates its first quarter 2017 operating revenue per ASM (RASM) will decline in the two to three percent range, as compared with first quarter 2016.

A better-than-expected February trip completion rate and the loss of traffic from the heavy rainfall in California are contributing factors to this revised RASM outlook. In addition, there was unexpected softness in close-in demand in the second half of February that has since rebounded in March. Bookings and unit revenue trends beyond first quarter 2017 remain encouraging. Southwest lowered 1Q17 unit revenue guidance, citing higher than expected completion factor, loss of traffic from heavy rains in California, and softness around close-in bookings in the second half of February. Management expects bookings and unit revenue trends to improve in March and beyond. Southwest should see a strong 2H17 given easy comps and slowing capacity growth.

Date: March 10, 2017

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