NEW YORK (TheStreet) -- Shares of Southwest Airlines (LUV) were slumping, lower by 5.95% to $33.96 in mid-morning trading Tuesday, after the airline said it started pulling down capacity in order to curb rising seat numbers that have the potential to eat into profit.
Southwest CEO Gary Kelly said the company began taking steps this week to manage 2015 capacity growth.
"With weaker-than-expected economic growth, we continue to evaluate our 2016 capacity plans," said Kelly.
He noted that Southwest plans to limit growth at 6%.
The company reported that capacity, or available seat miles, increased 7.6% from a year ago to 12.1 billion for the month of May.
Southwest flew 10.2 billion revenue passenger miles in May, an 8.5% rise from the 9.4 billion RPMs flown in May of 2014.
The May 2015 load factor was a record 84.4%, compared to the 83.7% from a year ago.
Dallas, Texas-based Southwest Airlines is a passenger airline with scheduled air transportation in both the domestic and near-international markets.
Separately, TheStreet Ratings team rates SOUTHWEST AIRLINES as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SOUTHWEST AIRLINES (LUV) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins."