01:58 PM EST, 01/30/2025 (MT Newswires) -- Southwest Airlines ( LUV ) on Thursday forecast year-over-year growth in a key revenue metric for the ongoing quarter as its fourth-quarter earnings rose more than expected amid strong travel demand.

The carrier expects first-quarter revenue per available seat mile, or RASM, to increase 5% to 7% from a year earlier. The company attributed the projected improvement to continued strength in the demand environment and capacity "rationalization." It projects capacity, as measured by available seat miles, or ASMs, to drop 2% to 3% for the quarter.

Adjusted earnings rose to $0.56 a share for the quarter through Dec. 31 from $0.38 a year earlier, topping a FactSet-polled consensus of $0.46. Operating revenue increased 1.6% to $6.93 billion, but lagged Wall Street's $6.96 billion view. RASM excluding special items grew 8%, while ASMs decreased 4.4%.

"The company had record fourth-quarter 2024 revenue performance due to the execution of tactical actions, including the maturation of the revenue management system and techniques, marketing and distribution evolution, and network optimization, as well as continued demand strength," Southwest ( LUV ) said in a statement.

For 2024, adjusted EPS dropped to $0.96 from $1.56 a year earlier, while operating revenue grew 5.3% to $27.48 billion. Wall Street was looking for $0.85 and $27.51 billion, respectively. Operating RASM increased 1.6%, while ASMs gained 4.1%.

"We closed out 2024 with positive momentum from our revenue initiatives and the performance of our operation," Chief Executive Bob Jordan said. "We still have much work to do."

The company said it plans to launch an additional $750 million accelerated share repurchase program in first quarter and is "urgently working" to accelerate and surpass the $500 million cost initiative announced at its 2024 investor day. Southwest ( LUV ) said it is "optimistic" that Boeing ( BA ) can exceed 38 737-8 aircraft deliveries this year.

The airline projects 2025 capital spending at $2.5 billion to $3 billion, compared with $2.05 billion last year. It plans ASM growth in the second half of the year, driven by an increase in aircraft utilization. Southwest ( LUV ) said it continues to plan for annual capacity growth in a range of 1% to 2% through 2027.

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