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Southwest CFO At Wolfe Conference: 'This Is A Peak Year' In Terms Of Growth

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Southwest CFO At Wolfe Conference: 'This Is A Peak Year' In Terms Of Growth
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Southwest Airlines Co (NYSE: LUV) CFO Chief Financial Officer Tammy Romo spoke at Wolfe Research's 8th Annual Global Transportation Conference on Tuesday, and shared some projections that are rocking the airline industry.

Here are 12 comments investors should be aware of:

  1. "We certainly get a lot of questions about capacity at Southwest, so I want to make sure everybody is tracking it where we are."
  2. "Just to remind everybody, for this year, we have pretty unique opportunities to grow. Also the guidance that we've given for 2016 reflects the carryover...our fleet plans remain unchanged from what we gave you last month."
  3. "Our full year 2015 available seat mile capacity falls in the 7 to 8 percent range."
  4. "For 2016, we expect the incremental growth from that carryover to be modest, which is what we communicated in our earnings call."
  5. "In total, our 2016 ASM are estimated to increase in the 6 to 7 percent range year over year."
  6. "Just another note on our capacity...keep in mind [this] is driven by the number of seats flown...the seat growth is coming at minimal cost."
  7. "Based on bookings and revenue trends thus far, we expect second quarter passenger unit revenue to decline 3 percent year-over-year, with the most difficult comparisons coming here in May."
  8. "Quick note on oil prices: Of course those continue to fluctuate, but they have remained on an upward trajectory since our last update."
  9. "We're estimating significant fuel cost savings [for the full year]...no real change on our costs excluding fuel, special items and profit sharing."
  10. "We pushed our schedule last week, so [capacity guidance] is going to fall in that 7 to 8 percent range."
  11. "We're very focused on capacity...doing what's right of course for Southwest shareholders. What we want to do is enable a lot of flexibility in our fleet plans...we have been planning for a very long time to expand service out of Love Field...the load factors [there] have been extremely high."
  12. "This year is a unique story, which actually carries over to next year...it's really that carryover into next year. If you're thinking about longer-term, I do think this is a peak [in terms of growth] year, and we would expect that to really glide down in line with what everyone else is thinking."

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