January Slowdown for Southwest Airlines
Updated from 12:04 p.m. EST
Low-cost carriers, led by
Southwest Airlines
(LUV) - Get Report
and
AirTran
(AAI)
, filled fewer seats on their planes during January, unlike many of the legacy carriers, which have been packing passengers into their planes.
Late Tuesday, Southwest announced that traffic for the month of January, measured in revenue passenger miles, dropped by a slight margin from last year, while capacity, measured in available seat miles, rose 2.6%. With revenue off slightly and capacity on the rise, the carrier's load factor, or the percentage of seats filled on its flights, came in at 56.2%, down from 58% a year earlier.
On Wednesday afternoon,
Delta Air Lines
(DAL) - Get Report
announced that January load factor came in at 67.3%, up 1.4 percentage points from last year, as traffic increased marginally against a 1.7% decline in capacity.
Even
Northwest Airlines
(NWAC)
, which saw traffic fall 4.2% in January from last year's levels, was able to boost load factors. But the fall in traffic was really due to the carrier's 6% reduction in capacity, which boosted load factor to 73.1%, up from 71.7% a year ago.
For Southwest, the year-over-year drop in monthly traffic, while just 0.5%, marked the first time since November 2002 that the carrier had seen any weakness in the metric and helped the carrier post the weakest January load factor since 1999.
While January is a seasonally difficult time for the airline industry, Southwest's stumble is also notable when compared with the January results posted by
Continental Airlines
(CAL) - Get Report
, whose load factor came in at a record, as traffic increased more than twice as fast as capacity.
AirTran, a rapidly growing Atlanta-based low-cost carrier, announced much larger increases in traffic but nonetheless saw load factor drop because of capacity additions. In January, AirTran said that traffic increased 14.9% and set a record for the month, but with capacity up 16.5%, also a record, load factor fell to 62.5% from the year-ago 63.4%.
In Wednesday trading, Southwest gained 3 cents, or 0.2%, to $14.50, while AirTran slid 51 cents, or 4.6%, to $10.46. Continental dropped 14 cents, or 1%, to $14.31; Delta dropped 5 cents, or 0.5%, to $9.80; while Northwest fell 9 cents, or 0.9%, to $10.10.