Traffic Up at Southwest Airlines, Down at American

Airline stocks fell Monday after oil prices rose again and Southwest and American each reported weakness in a key revenue figure.

United, Southwest and American all indicated that there were more empty seats on planes than a year earlier, which could reinforce concern that airlines might add too many flights for the current level of travel demand.

And rising oil prices led United and American to raise their forecasts of first-quarter fuel costs. U.S. crude oil rose $1.17, or 2.3 percent, to $52.86 per barrel on the New York Mercantile Exchange.

That raised the prospect that the recent sharp decline in jet fuel prices might be over. Oil prices are still down more than half from their summer 2014 highs, however, providing a windfall to big energy users including airlines.

Southwest Airlines Co. said Monday that January traffic rose 8.6 percent compared with a year earlier. But that failed to keep pace with a 10.2 percent growth in capacity, and the average Southwest flight was 75.1 percent full, down from 76.3 percent a year earlier.

The Dallas-based airline said that a key figure — revenue for every seat flown one mile — fell about 1 percent compared with January 2014. That closely watched ratio falls when airlines fill fewer seats or charge lower average fares.

American Airlines Group Inc. said that January traffic fell 2.8 percent while capacity shrank 0.2 percent. The average flight was 78.2 percent full, down from 80.3 percent in January 2014. The biggest increase in empty seats came on U.S. flights and those across the Pacific.

The Fort Worth, Texas-based company, which owns American and US Airways, expects the key revenue figure to decline between 2 percent and 4 percent in the first quarter versus a year ago.

The company expects jet fuel in the quarter will cost between $1.81 and $1.86 per gallon, versus a previous forecast of $1.71 to $1.76.

United Continental Holdings Inc. said after the market closed that it expects to pay between $2.10 and $2.15 per gallon for fuel, including the cost of settling hedges, which are contracts that act like insurance against rising oil prices. That was up from a forecast of $1.96 to $2.01 just three weeks ago.

Chicago-based United said that January traffic rose 1.1 percent, as strength on routes to Asia and Latin America offset weakness in the U.S. The average flight was 80.7 percent full compared with 80.9 percent a year earlier.

Shares of United fell $3.01, or 4.5 percent, to close Monday at $64.57. American dropped $1.61, or 3.4 percent, to $46.53. Southwest lost 88 cents, or 2 percent, to $43.26. Delta Air Lines Inc. fell $1.06, or 2.3 percent, to $44.45. Other airline stocks also fell.