Southwest Sees Strong Revenue Performance in Fourth Quarter

Though there was a lot of bad news for Southwest during the quarter, there was one bright spot. Revenues were up nicely, and that is good news for those who believe that the "no-fee" strategy is the right way to go for the airline.

We knew from previous guidance that Southwest had a good October, and revenue per available seat mile (RASM) was up a whopping 14 percent. The airline also said that RASM was up 7 percent for the combined November and December period. Why are those two combined?

It seems that they've combined November and December because November was pretty miserable. This should be obvious because load factor during the month was down several points. So with that tremendous drop in actual traffic without the number of seats falling as well, you knew it wouldn't be pretty.

I asked Southwest's PR team if they had given any guidance on November numbers alone. I was told that November was up slightly, so that means that December with its slight increase in load factor (1.5 points) had a fantastic increase in RASM to get to the 7 percent increase across the two months, probably closer to the October numbers.

January traffic was said to be weaker, so we'll have to see if these increase continue or if they're simply anomalies. But it does appear that Southwest is getting some very strong revenue gains.