As announced earlier,
Southwest Airlines Co.
) is expanding its service to Cancun and Los Cabos in Mexico after
debuting in international skies last month. The flight adds to the
newly launched services from Atlanta, Baltimore and Orlando to
Oranjestad, Aruba and Montego Bay, Jamaica.
Southwest Airlines will now operate daily service between Santa
Ana, CA and San Jose del Cabo/Los Cabos Mexico along with another
one from Atlanta/Baltimore to Cancun. A Saturday only service
between Cancun and Mexico will be launched on Aug 16, 2014.
Additionally, flights to Mexico City and Punta Cana, Dominican
Republic will be started from Nov 2.
The new destinations will be accretive to Southwest's
international operation as maximum U.S. visitors fly to Los Cabos
as a popular tourist destination from California. On the other
hand, Mexicans comprise a large chunk of the tourist population
traveling to Southern California. We believe such passengers will
benefit immensely from Southwest Airlines' low fare base.
After operating for several decades within the U.S. domestic
market, Southwest Airlines inaugurated its international services
in Jul 2014. The carrier has come a long way since it started
operations four decades ago. Having established itself as a top
domestic carrier, the company now plans to flag off international
flights from nine U.S. cities by the end of 2014.
At the moment, however, international services will have only a
modest contribution in Southwest Airlines' overall performance. In
this regard, the carrier will naturally lag behind larger rivals
like Delta Airlines Inc. (
), American Airlines Group Inc. (
) and United Continental Holdings Inc. (
), which boast strong international operations.
Through this expansion Southwest Airlines is technically taking
over the operations of its subsidiary AirTran, which flies to the
Caribbean. However, Southwest Airlines' international service is
here to stay for good as the carrier plans to add 50 international
routes going forward. We believe the carrier should gain from its
competitively priced low fares as compared to its traditional
Southwest Airlines currently carries a Zacks Rank #1 (Strong
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