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Airline Shares Jump as Southwest Eases Overcapacity Concerns

  • Investors cheer slower growth plan as salve for fare pressure
  • Improving outlooks at Delta, Allegiant provide added boost
Updated on

U.S. carriers climbed the most in almost two months after Southwest Airlines Co. said it would slow capacity growth next year, bringing the supply of seats and flights more in line with demand and possibly relieving pressure on fares.

Southwest’s decision to hold capacity expansion to less than 4 percent, compared with as much as 6 percent this year, added to reports from Delta Air Lines Inc. and Allegiant Airlines on improving trends in revenue for each seat flown a mile, a key industry gauge.