A decline in the utilization would mean less efficient capacity use, which would likely have a negative impact on the passenger yield per RPM (revenue passenger miles) or airline unit revenues. From January to September, Southwest Airlines’ unit revenues fell 1% YoY to 15.20 cents.
Southwest Airlines registered a decline of 2.8% and 2.5% in the passenger yield in the first and second quarters. Intense competition and a suboptimal flight schedule caused the yield to decline in the first quarter. A similar suboptimal flight schedule and the negative impact of the company’s Flight 1380 accident caused the yields to fall in the second quarter.
Southwest Airlines marked a strong recovery in the third quarter. The company’s passenger yield increased 2.3% YoY to 15.27 cents. Since the passenger yield fell 1% until September, Southwest Airlines could have accomplished its target of ending 2018 with an improved yield.
Southwest Airlines’ peers recorded an improvement in the passenger yield from January to September. United Continental, American Airlines, and JetBlue Airways’ yields improved 2.5%, 1.6%, and 0.9%, respectively.
View more information: https://marketrealist.com/2019/01/southwest-airlines-load-factor-continued-to-shrink/