Southwest Airline Inc.
) stock ended in green following the news of the company building
a new facility at the William. P. Hobby international airport in
Houston. The new facility will accommodate international flights
to the Caribbean, Mexico and the northern part of Latin
The facility will be built entirely by Southwest for around
$156 million and will have five gates. It is expected to further
enhance international air service from the Houston airport. The
project will also include expansion of its existing security
checkpoint. Moreover, it is expected to generate more than 10,000
jobs across Houston, which will have positive impact on the
The new facility is expected to be up and running from 2015
and will be accretive to both Southwest and the city of Houston.
It is expected to bring in one million additional passengers per
year to the Hobby international airport.
To support the anticipated increase in passenger footfall, the
airport authority is making a significant investment of its own
in addition to Southwest's investments. The authority will build
a separate multiple-level parking garage and enhance the existing
A couple of months back, Southwest's rival
United Continental Holdings Inc.
) unveiled its brand-new United Club lounge in Terminal 2 at San
Diego International Airport.
Southwest reported disappointing August traffic due to a 2%
annualized decline in RPM's, while load factor also decreased
3.4% year over year. We believe the new facility is an
effort by Southwest to improve its falling passenger count and
strengthen its position in the fourth largest U.S. city.
Southwest, which operates along with other prominent passenger
carriers such as
Delta Airlines Inc.
JetBlue Airways Corp.
) currently carries a Zacks Rank #3 (Hold). JetBlue and Delta
also carry a Zacks Rank #3 (Hold).
DELTA AIR LINES (DAL): Free Stock Analysis
SOUTHWEST AIR (LUV): Free Stock Analysis
UNITED CONT HLD (UAL): Free Stock Analysis
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