Southwest Airlines Co.
) posted a rise in traffic for Feb 2014. The traffic - measured
in revenue passenger miles (RPMs) - came in at 7.14 billion, up
1.2% from 7.06 billion recorded in the comparable month a year
However, on a year-over-year basis, consolidated capacity (or
available seat miles/ASMs) decreased 1.7% to 9.14 billion. The
load factor or percentage of seats filled by passengers increased
to 78.1% from 75.8% in Feb 2013. The market reacted positively to
the news as the stock gained 2.16% on Wednesday on NYSE.
PRASM (passenger revenue per available seat miles) increased
approximately 5% in Feb 2014. The carrier gained approximately 1%
in PRASM due to the winter storms.
In the first couple months of 2014, Southwest generated RPMs
of 14.56 billion (up 1.7% year over year) and ASMs of 18.87
billion (down 2.2% year over year). Load factor moved up 77.2%
from the year-ago figure of 74.2%.
Southwest Airlines acquired 12 pairs of slots at the LaGuarida
(LGA) airport in New York and has won bids to purchase 27 pairs
of slots at 27 pairs of slots. These were as 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 from May
Southwest Airlines' slot win at New York provides it with
scope for expansion in the city and gives it a competitive edge
JetBlue Airways Corp.
Delta Air Lines Inc.
With its cost-efficient business model, the company targets to
expand its network through the integration of AirTran aircraft
and the addition of domestic and international destinations.
Further the company announced its intention to target markets
where rivals have trimmed their operations.
Additionally, the carrier announced that it will offer
non-stop service to domestic destinations from Dallas Love Filed
airport from where flight limitations will finally be lifted. We
believe these initiatives along with winning of slots at LGA and
DCA are expected to create tailwinds for the company going
forward. Southwest Airlines currently holds a Zacks Rank #1
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