Southwest Airlines Co.
) witnessed improvements in traffic and capacity in Jun 2013,
supported by perked up activities across the network.
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The company's traffic - measured in revenue passenger miles
(RPMs) - was 9.85 billion for the reported month, up 2.3% from
9.62 billion recorded a year ago. On a year-over-year basis,
consolidated capacity (or available seat miles/ASMs) moved up
1.7% to 11.59 billion. The load factor or percentage of seats
filled by passengers improved marginally to 85.0% from 84.4% in
For the first half of this year, Southwest generated RPMs of
51.69 billion (up 1.6% year over year) and ASMs of 65.03 billion
(up 1.8% year over year). Load factor was 79.5%, reflecting a
decline of 20 basis points.
We find Southwest focused on a number of initiatives to increase
revenues and reduce costs over the next couple of quarters. These
include the customer-friendly programs, profitable collaborations
and network optimization.
The company is also adding novel features to its services as well
as introducing new products, which are enhancing its value and
profitability. Recently, Southwest entered into a deal with
Dish Network Corp.
) to provide the flyers of the airline free live television
service on their own Internet devices including phones, tablets
The U.S. low-cost carrier will report its second quarter 2013
financial results on Jul 25, 2013, before the opening bell. The
Zacks Consensus Estimate for earnings currently stands at 39
cents per share for the quarter. The estimate reflects a
year-over-year growth of 7.9%.
Southwest - which operates along with other prominent players
United Continental Holdings
- currently holds a Zacks Rank #3, implying a Hold rating.