Southwest Airlines(US:LUV)2025-01-30 11:30Financial Performance - Fourth quarter 2024 net income was $261 million, or $0.42 per diluted share, while full year net income was $465 million, or $0.76 per diluted share[2]. - Record fourth quarter operating revenues reached $6.9 billion, a 1.6% increase year-over-year, and full year operating revenues totaled $27.5 billion[10]. - Operating income for Q4 2024 was $278 million, a significant recovery from a loss of $404 million in Q4 2023[40]. - Net income for the year ended December 31, 2024, was $465 million, unchanged from the previous year[40]. - Basic net income per share for Q4 2024 was $0.44, compared to a loss of $0.42 per share in Q4 2023[40]. - The company reported a significant increase in operating income, excluding special items, to $397 million in Q4 2024, up 118.1% from $182 million in Q4 2023[41]. - The company reported a net income, excluding special items, of $356 million for the three months ended December 31, 2024, representing a 50.2% increase from $237 million in the same period of 2023[42]. - Total income before income taxes, excluding special items, was $455 million for the three months ended December 31, 2024, a 47.2% increase from $309 million in the prior year[42]. Revenue and Expenses - Total operating revenues for Q4 2024 reached $6,931 million, a 1.6% increase from $6,822 million in Q4 2023[40]. - Passenger revenue increased by 1.5% to $6,307 million in Q4 2024, compared to $6,211 million in Q4 2023[40]. - Total operating expenses decreased by 7.9% to $6,653 million in Q4 2024, down from $7,226 million in Q4 2023[40]. - Operating revenues, excluding special items, increased by 3.3% to $7,047 million in Q4 2024[41]. - Operating expenses, excluding fuel and oil expense and special items, rose by 6.3% to $5,307 million in Q4 2024[41]. - Fuel and oil expense, as reported, decreased by 25.8% to $1,264 million in Q4 2024, compared to $1,703 million in Q4 2023[40]. - Operating expenses per ASM, excluding fuel and oil expenses, increased to 12.19 cents for the three months ended December 31, 2024, an 11.1% increase from 10.97 cents in the previous year[43]. Shareholder Returns - The company returned $680 million to shareholders in 2024 through dividends and share repurchases[2]. - The Company returned $680 million to its shareholders in 2024, which included $430 million in dividends and $250 million in share repurchases[29]. - The Company plans to launch an additional $750 million accelerated share repurchase program in the first quarter of 2025[29]. Capital Expenditures and Debt - Full year 2024 capital expenditures were $2.1 billion, with 2025 capital spending estimated between $2.5 billion and $3.0 billion[22]. - The Company paid $1.3 billion during 2024 to retire debt and finance lease obligations, including the early redemption of its $1.3 billion outstanding 5.25% Notes due 2025[29]. - Total debt, including finance leases, decreased to $6,699 million as of December 31, 2024, from $8,007 million in 2023[65]. - Adjusted debt as of December 31, 2024, was $7,801 million, down from $8,957 million in 2023[65]. - Leverage ratio (adjusted debt to invested capital) improved to 43% in 2024 from 46% in 2023[65]. Operational Metrics - Fourth quarter revenues per available seat mile (RASM), excluding special items, increased by 8.0% year-over-year[10]. - For Q1 2025, RASM is expected to increase by 5% to 7% year-over-year, while available seat miles (ASMs) are projected to decrease by 2% to 3%[4]. - The company anticipates a 7% to 9% increase in CASM-X year-over-year for Q1 2025, driven by inflationary pressures and capacity moderation efforts[18]. - Revenue passengers carried decreased by 5.2% to 34,126,000 in Q4 2024 compared to Q4 2023[48]. - Average passenger fare increased by 7.1% to $184.81 in Q4 2024 compared to $172.60 in Q4 2023[48]. - Load factor improved by 1.0 percentage points to 79.2% in Q4 2024 compared to 78.2% in Q4 2023[48]. - Available seat miles decreased by 4.4% to 43,533 million in Q4 2024 compared to Q4 2023[48]. - Fuel consumed decreased by 6.0% to 531 million gallons in Q4 2024 compared to Q4 2023[48]. Cash Position - The Company ended 2024 with $8.7 billion in cash and cash equivalents and short-term investments, along with a fully available revolving credit line of $1.0 billion[29]. - Cash and cash equivalents at the end of the period were $7,509 million, down from $9,288 million at the end of 2023[56]. - The company reported a gain on sale-leaseback transactions of $871 million for the year ended December 31, 2024[56]. - The company incurred a loss on extinguishment of debt amounting to $2 million for the year ended December 31, 2024[56]. Future Outlook - The company is currently 51% hedged for fuel consumption in Q1 2025, with a maximum hedged percentage of 47% for the full year 2025[14]. - The Company has 63 remaining contractual but undelivered aircraft for 2024, consisting of 27 -7s and 36 -8s, and anticipates 73 contractual deliveries in 2025[25]. - The Company is currently using a planning assumption of 38 -8 aircraft deliveries in 2025[25]. - The Company has a total of 694 firm orders and options in its previous 737 order book as of October 24, 2024[26]. - The company aims to exceed its 2027 cost reduction target of $500 million, supporting a 2025 CASM-X exit rate in the low-single digits[1]. Recognition and Awards - The company was recognized as the 1 Airline for Economy Class Customer Satisfaction in the J.D. Power 2024 North America Airline Satisfaction Study for the third consecutive year[29].