DALLAS (AP) — Southwest Airlines Co. said Tuesday that a key revenue measure rose just 2 percent in July, in another sign that it's becoming harder for airlines to raise fares amid a weak economy.
The statistic measures revenue for each mile times available seats. It goes up when airlines raise prices, fill more seats, or do both.
July's increase was the smallest all year for Southwest, which includes its AirTran Airways subsidiary in the figures.
The same thing happened at US Airways, which reported last week that the revenue statistic rose just 1 percent in July.
Airlines raised base fares on U.S. flights about a dozen times from the start of 2011 into early 2012, then imposed no increases for four months. The latest attempt to raise fares, led by United Airlines, failed this week when Southwest declined to match the higher prices.
Southwest chief financial officer Laura Wright said on a conference call with analysts July 19 that the company saw "solid" growth in the revenue measure for July, but that it would fall short of June's 6 percent increase.
On Tuesday, UBS analyst Kevin Crissey said 2 percent was weaker than he expected and caused him to lower his forecast of third-quarter earnings to 15 cents per share from 21 cents per share.
"Southwest is in the midst of many company-specific changes that over time may generate shareholder value but currently (Southwest's) revenue trend appears consistent with the slowdown other airlines are observing," Crissey wrote in a note to clients.
Southwest said passenger traffic was flat with last July, as passengers flew 10.04 billion miles. Southwest and AirTran raised passenger-carrying capacity by 0.6 percent.
The average plane was 84.6 percent full, compared with 85.1 percent in July 2011.
Through the first seven months of 2012, traffic was down 0.8 percent, capacity was flat, and planes were 80.5 percent full, down from 81.1 percent a year earlier.
Southwest shares fell 15 cents to $9.11 in afternoon trading.