The company expects first quarter 2024 RASM to increase in the range of 2.5 percent to 4.5 percent, year-over-year. Sequentially, the performance represents a healthy improvement driven primarily by network optimization, market share contributions from the Company's Global Distribution System initiative, growth in the Rapid Rewards loyalty program, and continued strength in overall demand.

The company ended 2023 with 817 Boeing 737 aircraft, including 223 Boeing 737-8 aircraft. The company plans to retire approximately 49 aircraft in 2024. The company has 495 MAX firm orders for the years 2024 through 2031 and 199 MAX options for the years 2025 through 2031.

The Company has commitments associated with various airport improvement projects, including construction at Houston Hobby International Airport. In April 2023, the Company executed a ground lease agreement with Los Angeles World Airports for construction at Los Angeles International Airport.

To boost operational resiliency in key areas across the Company and to mitigate the risk of a recurrence, the Company developed a three-part tactical action plan focused on improving winter operations, accelerating operational-related investments, and enhancing cross-team collaboration. The Company's action plan was released in March 2023 and key winter operations steps were completed as of October 2023, as planned.

On January 22, 2024, the Company's nearly 11,000 Pilots, represented by SWAPA, voted to ratify a five-year contract extension with the Company. On January 31, 2023, the Company's 50 Facilities Maintenance Technicians, represented by AMFA, ratified a new four-year collective bargaining agreement with the Company.

The Company's ability to control labor costs is limited by the terms of its collective-bargaining agreements. The Company has been required to provide incentive pay and increase certain starting wage rates to address these challenges

The airline industry is particularly sensitive to changes in economic conditions, and continued or future unfavorable economic conditions could negatively affect the Company's results of operations and require the Company to adjust its business strategies.

The Company's business can be significantly impacted by the availability of jet fuel and high and/or volatile fuel prices, and the Company's operations are subject to disruption in the event of any delayed supply of fuel; therefore, the Company's strategic plans and future profitability are likely to be impacted by the Company's ability to effectively address fuel price increases and fuel price volatility and availability.

The Company is currently dependent on Boeing as the sole manufacturer of the Company's aircraft. If the MAX aircraft were to become unavailable for the Company's operations, or if the Company were to experience prolonged delivery delays of MAX aircraft, the Company's business plans, strategies, and results of operations could be materially and adversely affected.

The airline industry is intensely competitive, and Southwest has historically competed with other airlines on virtually all of its scheduled routes. In recent years, the majority of domestic airline service has been provided by Southwest and the other largest major U.S. airlines.

The Company believes its low-cost operating structure has historically provided it with an advantage over many of its airline competitors by enabling it to continue to charge competitively low fares.

The Company believes its Customer Service and Customer-friendly policies continue to positively differentiate it from many of its competitors: The Company offers up to two free checked bags, does not charge change fees, Rapid Rewards points do not expire, Flight credits do not expire, and there are no additional fees for items such as seat selection, soft drinks, and snacks where available, curb-side check-in where available, and telephone reservations.

Interruptions or disruptions in service at one of the Company's core stations have had, and could in the future have, a material adverse impact on its operations. Extreme weather events can also materially and adversely disrupt operations.

The Company has increasingly focused on designing its network around core stations in an effort to provide greater connectivity and support operational reliability and recoverability.

Southwest's ability to achieve high asset utilization because aircraft can be scheduled to minimize the amount of time they are on the ground. This, in turn, has reduced the number of aircraft and gate facilities that would otherwise be required and is designed to allow for higher Employee productivity over a long period of time.

The Company is investing in technology and tools that are expected to enhance resiliency and improve its recovery during irregular operations, implemented a new revenue management system, introduced Customer bag tracking, enhanced Customer digital self-service capabilities, and launched Southwest Business Meetings.

The Company also continues to improve digital revenue generating capabilities. The Company activated a robust suite of optimizations designed to improve product performance for air sales, Upgraded Boarding, EarlyBird Check-In, and other ancillary products such as Cars, Hotels, and Vacations.

The Company also continues to explore and pursue generative artificial intelligence (“AI”) capabilities with a goal to improve Customer service and to drive lower cost while exceeding Customers' Hospitality expectations.

The Company estimates its 2024 capital spending to be in the range of $3.5 billion to $4.0 billion, which includes approximately $2.2 billion in aircraft capital spending and $1.6 billion in non-aircraft capital spending. The company expects to spend approximately $1.7 billion in 2024 on technology investments, upgrades, and system maintenance.

The Board reinstated and declared a quarterly cash dividend of $0.18 per share on December 6, 2022, and has continued to pay quarterly dividends through 2023. During 2023, the Company returned $429 million to Shareholders in dividend payments.

The Company has suspended share repurchase activity until further notice. The Company has approximately $899 million remaining under its current share repurchase authorization.

In 2021, the Company announced near- and long-term environmental sustainability goals, in addition to a series of actions and initiatives designed to assist the Company in achieving these goals. The Company refreshed its environmental sustainability plan in early 2023 and continually monitors developments related to climate change and evaluates its goals and progress against these developments.

During 2022, the Company invested in SAFFIRE Renewables, LLC to develop and produce scalable SAF. During 2023, the Company formed Southwest Airlines Renewable Ventures LLC to manage its investment in SAFFiRE and engage in other similar activities in support of the Company's SAF goals, initiatives, and strategies.

There are additional areas of rulemaking occurring at the state and federal levels with respect to climate-change-related matters that could also increase the Company's compliance obligations and costs and expenditures related to the same. The Company is subject to risks related to its sustainability goals and disclosures, which may affect stakeholder sentiment and the Company's reputation and brand.

The airline industry is particularly sensitive to changes in economic conditions, and continued or future unfavorable economic conditions could negatively affect the Company's results of operations and require the Company to adjust its business strategies.

Competition within the airline industry is intense and highly unpredictable, and Southwest has historically competed with other airlines on virtually all of its scheduled routes.

The Company is subject to extensive FAA regulation that may disrupt or necessitate modifications to the Company's operations, business plans, and strategies.