Southwest Airlines Forecast Update

(Reuters) – Southwest Airlines on Thursday raised its forecast for fourth-quarter revenue per available seat miles (RASM), benefiting from improved pricing and a rebound in domestic travel demand.

Shares of the budget carrier rose about 2.5% before the bell.

The airline has implemented a series of efforts over the past year to reinvigorate demand, including partnerships, offering seats with more leg room for customers, and aircraft sale leasebacks.

In October, the carrier announced it reached a deal with activist Elliott to resolve a prolonged boardroom battle.

The airline now expects its fourth-quarter RASM, a proxy for pricing power, to increase between 5.5% and 7%, up from a previous expectation of 3.5% to 5.5%.