Southwest Airlines Co.
) posted a rise in traffic for March 2014. The traffic - measured
in revenue passenger miles (RPMs) - came in at 9.60 billion, up
1.6% from 9.44 billion recorded in the comparable month a year
ago. Meanwhile, on a year-over-year basis, consolidated capacity
(or available seat miles/ASMs) increased 0.8% to 11.60
The load factor or percentage of seats filled by passengers
increased to 82.7% from 82.0% in March 2013. PRASM (passenger
revenue per available seat miles) increased approximately 1% in
the reported month.
In the first three months of 2014, Southwest generated RPMs of
24.15 billion (up1.7% year over year) and ASMs of 30.47 billion
(down1.1% year over year). Load factor, moved up 79.3%, from the
year-ago figure of 77.1%.
Southwest Airlines acquired 12 pairs of slots at the LaGuarida
(LGA) airport in New York and has won bids to purchase 27 pairs
of slots at Reagan National Airport (DCA) in Washington. These
were as part of U.S. Airways Group's merger with American
Airlines to form
American Airlines Group Inc.
). Southwest Airlines aims to initiate services at LGA from May
Southwest Airlines' slot win at New York provides it with the
scope for expansion in the city and gives it a strong foothold
JetBlue Airways Corp.
Delta Air Lines Inc.
). Further, the company has decided to extend daily departures
from DCA to 44 from the current 17, thus increasing its
operations from the airport more than 2.5 times. Apart from
expanding Southwest's reach to 14 destinations, the new low-fare,
non-stop services from DCA will strengthen the carrier's
operations in the capital city.
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.
Further, the company announced its intention to target markets
where rivals have trimmed their operations.
The carrier also announced that it will offer non-stop service
to domestic destinations from Dallas Love Field airport from
where flight limitations will finally be lifted. We believe these
initiatives along with the slot wins will create tailwinds for
the company going forward. Southwest Airlines currently holds a
Zacks Rank #1 (Strong Buy).
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