Southwest Airlines Co.
) posted a rise in traffic for Dec 2013. The traffic - measured
in revenue passenger miles (RPMs) - came in at 8.97 billion, up
9.8% from 8.17 billion recorded in the comparable month a year
ago. On a year-over-year basis, consolidated capacity (or
available seat miles/ASMs) increased 3.4% to 10.84 billion. The
load factor or percentage of seats filled by passengers increased
to 82.8% from 78.0% in Dec 2012. The market reacted positively to
the news as the stock gained 3.33% on Wednesday on Nasdaq.
In 2013, Southwest generated RPMs of 104.35 billion (up 1.4%
year over year) and ASMs of 130.34 billion (up 1.7% year over
year). Load factor, however, moved down to 80.1%, reflecting a
year-over-year decline of 20 basis points.
The substantial increase in PRASM (passenger revenue per
available seat mile) was the most notable incident of the month.
For Dec 2013, PRASM is estimated to have increased in the 14-15%
range from Dec 2012.
Southwest Airlines acquired 12 pairs of slots at the LaGuarida
(LGA) airport in New York from U.S. Airways Group. These were as
part of U.S. Airways Group's merger with American Airlines to
American Airlines Group Inc.
Southwest Airlines aims to initiate services at LGA from May
2014. The company is also looking to win slots at Washington
Regan National Airport (DCA), which is to be divested by American
Airlines and U.S. Airways.
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. To
accommodate international flights to the Caribbean, Mexico and
the northern part of Latin America, the company is building a new
facility at the William. P. Hobby international airport in
We believe these initiatives along with the winning of slots
at LGA are expected to create tailwinds for the company going
forward. Southwest Airlines currently holds a Zacks Rank #1
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