Southwest Airlines Co (ticker: LUV) shares are selling off on Friday after the company reported a number of key metrics from the month of February.
On Friday morning, Southwest reported 8.7 billion total February revenue passenger miles, a 1.1 percent increase from a year ago. In addition to the bump in RPMs, the airline also reported a 1.2 percent uptick in available seat miles (ASM) from 10.9 billion to 11.0 billion.
Load factor, a measure of how efficiently an airline utilizes its capacity, was flat compared to last year at 79 percent.
Despite the positive changes from a year ago, Southwest cut its estimate for first-quarter operating revenue per ASM (RASM). Previously, Southwest had indicated that it anticipated first-quarter RASM growth to come in between zero and -1 percent compared to a year ago. The company is now calling for a decline of 2 to 3 percent.
RASM is a metric used to determine how efficiently an airline is utilizing its passenger capacity to generate revenue.
Southwest Airlines shareholders have had a rough go of it so far in March after finishing 2016 on a strong note. In the past two quarters, billionaire investing icon Warren Buffett reported new stakes in Southwest Airlines, Delta Air Lines (DAL), American Airlines Group (AAL) and United Continental Holdings (UAL).
In the past, Buffett has avoided airlines, even calling them “a death trap for investors” in a 2013 letter to investors. But Buffett’s change of heart led Morgan Stanley to speculate Buffett’s Berkshire Hathaway (BRK.A, BRK.B) could acquire Southwest Airlines entirely.
Unfortunately for Southwest investors, Buffett recently told…
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