United Airlines (UAL) and Southwest Airlines (LUV) upgraded their fourth-quarter unit revenue estimates Tuesday, a week after Delta Air Lines (DAL) raised its outlook for that metric.
United expects Q4 unit revenue to drop 1.25%-1.75% vs. a prior outlook for a 3%-4% decline. Southwest now sees it falling 3%-4%, better than its earlier guidance for a 4%-5% drop
Both carriers cited an improvement in close-in yields, or how much an airline can get passengers to pay for flights booked closer to departure time.
For December, United's traffic increased 2.6%, matching its capacity gain. Load factor edged up to 83.1% from 83% a year ago. Southwest's traffic rose 4.2%, while capacity grew 4.8%. Load factor shrank to 82.6% from 83%.
Meanwhile, Alaska Air Group (ALK) reported that December traffic including newly acquired Virgin America, rose 5.6% vs. a year earlier as capacity climbed 5%. That pushed the load factor, or seats filled, by 0.5 percentage point to 83.1%.
Shares of United rallied 1.8% in extended trading, after closing up 3.3% at 73.66. Southwest finished 2.1% higher at 51.34. Delta rose 2.5% to 50.93 on the stock market today, holding in buy range from a 49.51 buy point. Alaska Air shot up 5.2% to 92.00, hitting a record high. American Airlines (AAL) climbed 3%.
Last week, Delta said it expects Q4 unit revenue to decline 2.5%-3%, better than the carrier's forecast last month for a roughly 3% dip, and has said it sees the metric going flat in Q1.
The carrier credited strong demand and better close-in domestic yields as well as revenue management and more restrained capacity.
Delta reports Q4 results Thursday. Analysts expect earnings per share to tumble 30.5% to 82 cents, with revenue down 1.6% to $9.353 billion.
Also late Tuesday, Spirit Airlines (SAVE) said December traffic jumped 12.5%, outpaced by a 16.6% surge in capacity. Load factor narrowed to 80.3% from 83.3%.
