Several strategies like fleet restructuring, introduction of
international services and capacity management are poised to drive
Southwest Airlines' top and bottom line. Substantial growth
opportunities, particularly within the domestic market, also bode
well for the carrier. Winning of slots and expansion of operations
at the Reagan and LaGuardia airports will further boost its
capacity and network presence. Additionally, Southwest Airlines
continues to boost shareholders' return through dividends and share
buybacks. Further, the company flagged off flights from Dallas Love
Field and constructed a new facility in Houston Hobby airport which
will significantly enhance its international operations. We are
also positive on Southwest Airlines' acquisition of AirTran
Airways. Based on these factors, we maintain our Outperform
recommendation on the stock. Our target price is $46 per share.
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.
Southwest Airlines Co. (LUV): Read the Full
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