Southwest Airlines Co.
) recently posted a rise in traffic for April 2014. The month's
traffic - measured in revenue passenger miles (RPMs) - came in at
9.11 billion, up 4.4% from 8.73 billion recorded in the comparable
period a year ago. Meanwhile, on a year-over-year basis,
consolidated capacity (or available seat miles/ASMs) decreased 0.6%
to 11.17 billion. The load factor or percentage of seats filled by
passengers increased to 81.7% from 77.8% in April 2013. PRASM
(passenger revenue per available seat miles) went up approximately
7-8% in the reported month.
In the first four months of 2014, Southwest generated RPMs of
33.27 billion (up 2.4% year over year) and ASMs of 41.64 billion
(down 0.9% year over year) leading to a load factor of 79.9%, from
the year-ago figure of 77.3%.
Southwest Airlines acquired 12 pairs of slots at the LaGuardia
(LGA) airport in New York and has won bids to purchase 27 pairs of
slots at Reagan National Airport (DCA) in Washington, D.C. This is
part of U.S. Airways Group's merger with American Airlines to form
American Airlines Group Inc.
). Southwest Airlines aims to initiate services at LGA in the
second quarter of 2014.
Southwest Airlines' slot win at New York has widened its scope
for expansion in the city, besides consolidating its foothold
against peers like
JetBlue Airways Corp.
Delta Air Lines Inc.
). Further, the company has decided to extend daily departures from
DCA to 44 from the current 17, thus increasing its operations from
the airport by more than 2.5 times. Apart from expanding
Southwest's reach to 14 destinations, the new low-fare, non-stop
services from DCA will strengthen the carrier's operations in the
capital city as well.
With its cost-efficient business model, the company Southwest
Airlines' eyes network expansion through the integration of AirTran
aircraft and the addition of domestic and international
destinations. Further, the company announced its intention to
target those markets where rivals have trimmed their
The carrier also announced that it will now offer non-stop
services to domestic destinations from Dallas Love Field airport,
wherein flight limitations will finally be lifted. We believe these
initiatives along with the slot wins will create tailwinds for the
company going forward.
Southwest Airlines currently holds a Zacks Rank #1 (Strong
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