September Traffic Report: Southwest Versus United

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Both Southwest Airlines Co. (NYSE: LUV) and United Continental Holdings Inc. (NYSE: UAL) reported their September traffic numbers on Tuesday morning. Overall, the numbers were not earth-shattering, but they had some effect on the shares of each.

Southwest flew 9.9 billion revenue passenger miles (RPMs) in September 2016, an increase of 7.9% from the 9.2 billion RPMs flown in September 2015. Available seat miles (ASMs) increased 6.0% to 11.8 billion in September 2016, compared with September 2015 ASMs of 11.1 billion. The September 2016 load factor was a record for the month of September at 84.2%, compared with 82.7% in September 2015.

The company continues to estimate its third-quarter 2016 operating revenue per ASM (RASM) will decline in the 3.5% to 4.5% range, as compared with third quarter 2015, with roughly 0.5 point of the decline resulting from the company’s July 2016 technology outage.

As for United, its September 2016 consolidated traffic (RPMs) increased 3.9% and consolidated capacity (ASMs) increased 3.6% from September 2015. Its September 2016 consolidated load factor increased 0.3 points compared to September 2015.

The company now expects third-quarter 2016 consolidated passenger unit revenue to decline in the range of 5.5% to 6.0% compared to the third quarter of 2015. The year-over-year performance was primarily affected by a strong U.S. dollar, lower surcharges, travel reductions from customers influenced by lower oil prices, competitive actions and passenger demand not growing at the same pace as industry capacity. The company’s consolidated passenger unit revenue result was near the top end of the initial guidance range, largely due to better than expected September close-in bookings driven by the timing of certain holidays.

Shares of United were last seen trading down fractionally $53.98, with a consensus analyst price target of $58.69 and a 52-week trading range of $37.41 to $61.87.

Southwest was up fractionally at $40.00. The consensus price target is $48.25 and a 52-week range is $33.96 to $51.34.