Southwest Airlines Co. affirmed its unit revenue outlook for the fourth quarter but lowered its guidance range for fuel costs.
The U.S. carrier now expects fuel costs of $2.25 per gallon to $2.30 per gallon in the fourth quarter, down from its previous forecast range of $2.30 per gallon to $2.35 per gallon.
The company's new fuel cost guidance includes 7 cents per gallon in favorable cash settlements from fuel derivative contracts, compared to a prior estimate of 14 cents per gallon.
For the fourth quarter, Southwest Airlines still projected a flat to 1% year-over-year increase in operating costs per available seat mile, excluding fuel and oil expense and profit-sharing expense.
Southwest Airlines also maintained its forecast that operating revenue per available seat mile, a key airline industry metric, will grow between 1% and 2% year over year in the fourth quarter.
Available seat mile growth was also projected at between 6% to 6.5% year over year in the fourth quarter, unchanged from the prior guidance.