Southwest Airlines (LUV) Q4 2024 earnings summary

Executive summary

• Fourth quarter and full year 2024 performance exceeded expectations, with improved year-over-year margins, record operating revenues of $6.9B and $27.5B, and strong operational execution across key initiatives.

• Achieved Q4 and full year 2024 net income of $261M and $465M; adjusted net income of $356M and $597M, respectively.

• The Southwest Even Better plan is driving transformation, focusing on efficiency, cost reduction, customer experience, and new revenue streams.

• Returned $680M to shareholders via dividends and buybacks; announced $750M accelerated share repurchase.

• Industry conditions remain constructive, with demand strength and capacity moderation supporting results.

Financial highlights

• Fourth quarter 2024 unit revenue (RASM) increased 8% year-over-year, surpassing guidance and historical trends; Q4 RASM (adjusted) up 8% YoY.

• Q4 net income: $261M ($0.42/share); full year: $465M ($0.76/share); adjusted Q4 net income: $356M ($0.56/share); full year: $597M ($0.96/share).

• Fourth quarter 2024 CASM-ex rose 11.1% year-over-year; full year CASM-ex up 7.8%, both including a $92 million gain from a sale-leaseback transaction.

• Full year 2024 gross capital expenditures were $2.1 billion, with net capital expenditures at $1.2 billion.

• $680 million returned to shareholders in 2024 via $430 million in dividends and $250 million in share repurchases.

Outlook and guidance

• First quarter 2025 RASM projected to rise 5%-7% year-over-year, with full year 2025 RASM up 3–5% and positive RASM growth expected throughout 2025.

• CASM-ex for first quarter 2025 expected to increase 7%-9% year-over-year, with cost inflation easing as the year progresses and full year CASM-X growth to exit in low-single digits.

• Modest capacity growth of 1%-2% year-over-year planned for 2025, fully funded by efficiency initiatives; 2027 annual capacity growth target 1–2%.

• 2025 after-tax ROIC target ≥10%; 2027 target ≥15%.

• 2025 economic fuel cost per gallon: $2.45–$2.55; 47% fuel hedged.