Southwest Airlines Co. said its February traffic reached 1.6 billion revenue passenger miles, up 2.4 percent from February 1994, but the percentage of seats filled plunged.
Southwest said its capacity was up 13.4 percent to 2.65 billion and the load factor fell to 60.4 percent from 66.9 percent. Southwest has been warning that fare-cutting by rivals and problems with expanding its operations are cutting into first-half profits.For the first two months of 1995, Southwest traffic was up 3.1 percent to 3.26 billion as capacity rose 13.3 percent to 5.53 billion. Load factor for the two months was off to 59 percent from 64.9 percent.
Despite the rocky results and outlook, Southwest has continued to expand. It began service Monday in Omaha, Neb., its 45th city with five daily nonstop flights to Chicago's Midway Airport, two daily nonstop flights to Las Vegas, and two daily nonstop flights to Phoenix.
The carrier offered a $39 one-way fare to Chicago and an $89 fare for Las Vegas and Phoenix with a 21-day advance purchase.
Southwest also plans a big expansion of its service in Reno, Nev., and increases in its flight schedule by 31 round-trip flights in the West and Midwest by the middle of the year.
The announcements show that Southwest is not retrenching despite issuing a bearish earnings forecast on Feb. 13, which said earnings for the first half of the year would be below expectations.
The forecast said profits were being pressured by rivals cutting prices to a much greater extent than they did in 1992 and 1993. Southwest is facing tough competition from United in the California corridor, where the nation's No.1 airline launched the United Shuttle last October.
Southwest has also been facing some difficulties in integrating the operations of Morris Air into its system. Southwest bought Utah-based Morris in late 1993 for $135 million.
Southwest previously reported fourth-quarter earnings dropping 47 percent from the 1993 quarter to $20.3 million.
Wall Street analysts have estimated that Southwest's first quarter earnings will come in well below the 1994 quarter's results of $41.8 million, or 28 cents a share, on sales of $619.4 million. Analyst Thomas Longman of Lehman Bros. has estimated it will come in at 15 cents a share.