Key revenue measure is flat for Southwest Airlines

Southwest Airlines says traffic rising but key revenue measure flat compared with a year ago

Associated Press

DALLAS (AP) -- Southwest Airlines Co. said Friday that a key revenue measure was flat in March, another sign that airlines are struggling to sell more high-fare tickets.

Southwest, which owns AirTran Airways, said that traffic on the two carriers rose 4 percent last month compared with a year earlier, as passengers flew 9.44 billion miles.

Despite the increase in traffic, Southwest said that passenger revenue for each seat flying one mile was unchanged from March 2012. That statistic is a closely watched indicator of pricing power in the airline business.

Airlines are leaving fewer empty seats on their planes — occupancy is at levels not seen since 1945 — but they appear to be selling fewer seats at the highest fares or discounting more tickets.

Earlier this week, Delta Air Lines Inc. and US Airways Group Inc. reported weaker-than-expected figures for the same revenue-per-mile statistic and said that last-minute bookings were disappointing. That's important because passengers usually must pay more for last-minute tickets.

Delta and US Airways blamed the weakness in late bookings on automatic federal spending cuts, which presumably would result in less travel by government employees.

Dallas-based Southwest, the nation's fourth-largest airline, raised passenger-carrying capacity in March by 3.8 percent. Airlines can increase capacity by adding flights or making longer trips, which Southwest did.

With traffic rising slightly faster than capacity, planes were a bit more full. Southwest said average occupancy was 82 percent, up from 81.8 percent in March 2012.

In late morning trading, shares of Southwest fell 16 cents, or 1.3 percent, to $12.64 — about double the rate of decline in the Standard & Poor's 500 index.

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