Higher costs and lower fares at Southwest

|About: Southwest Airlines Co. (LUV)|By:, SA News Editor

Southwest Airlines (NYSE:LUV) trades lower after higher Q1 expenses led to an EPS miss. Operating expenses jumped 8.8% during the quarter as both labor and fuel costs piled up.

"Our cost inflation is expected to abate dramatically in second half 2017 to end this year with fourth quarter unit costs in line with year-ago levels, excluding fuel and oil, special items, and profitsharing," says CEO Gary Kelly.

Passenger revenue yield fell 2.6% to $0.1508, while passenger revenue per available seat mile fell 3.3% to $0.1206. Fares averaged $149.78 in Q1 vs. $153.75 a year ago.

Looking ahead, Southwest expects Q2 revenue per available seat mile to increase 1% to 2%.

Previously: Southwest Airlines misses by $0.02, misses on revenue (April 27)

LUV -2.56% premarket to $55.48.