We maintain our Outperform recommendation on Southwest Airlines.
Several strategies like fleet restructuring, introduction of
international services and capacity management will boost the
carrier's top and bottom line. Substantial growth opportunities,
particularly within the domestic market, also bode well for the
carrier. Integration of AirTran will boost Southwest's operational
and financial performance. Winning of slots and expansion of
operations from the Reagan and LaGuardia airports will further
boost its capacity and network presence. Further, the beginning of
operations from Dallas Love Field and the construction of a new
facility in Houston Hobby airport will boost its international
operations. Additionally, the company continues to boost
shareholders' return via dividends and share buybacks. Such
attempts combined with a healthy financial profile will likely
support its future endeavors.
Based in Dallas, TX, Southwest Airlines Co. (LUV) is a passenger
airline that provides scheduled air transportation in the United
States. It primarily provides short-haul, high frequency,
point-to-point and low-fare services. Southwest Airlines is a
leisure-oriented point-to-point carrier largely in Las Vegas,
Chicago (Midway) and Phoenix. The company's point-to-point route
structure include services to and from many secondary or downtown
airports such as Dallas Love Field, Houston Hobby, Chicago Midway,
Baltimore-Washington International, Burbank, Manchester, Oakland,
San Jose, Providence, Ft. Lauderdale/Hollywood, and Long Island
Southwest Airlines is one of the world's most profitable
low-cost airlines that consistently offers the lowest fares. The
company sells frequent flyer credits and related services to
companies participating in its Rapid Rewards frequent flyer
program, including credit card companies, hotels, telecommunication
companies and car rental agencies.
In May 2011, Southwest Airlines completed the acquisition of
AirTran Holdings, which now operates as a wholly owned subsidiary
under the name AirTran Airways. As of Jun 30, 2014, Southwest
Airlines along with AirTran operated 695 Boeing aircraft serving 93
destinations in approximately 40 states.
Southwest Airlines Co. (LUV): Read the Full
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