Southwest Airlines Co (NYSE:LUV) stock fell more than 3% after the airline cut its second quarter revenue forecast and projected higher expenses.
It now expects revenue per available seat mile (RASM), how much it brings in for every seat if it flies one mile, will be down between 4% and 4.5% year-over-year, up from its earlier forecast of a drop between 1.5% and 3.5%.
“The reduction in the company’s RASM expectations was driven primarily by complexities in adapting its revenue management to current booking patterns in this dynamic environment,” Southwest said in a regulatory filing.
Unit expenses, excluding fuel, are seen 7.5% higher, after the airline previously said it expected this to be flat from the year-ago quarter.
The airline said it continues to expect to report record quarterly operating revenue for Q2 and its capacity to grow between 8% and 9% from the year-ago period.
Southwest is set to hand down its Q2 earnings report on July 25.
Shares of Southwest traded down 3.4% at $27.55 in early trade on Wednesday.