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Southwest Airlines to Gain from Low Fuel Prices, New Routes

On Nov 16, 2015, we issued an updated research report on Southwest Airlines Co.LUV .

Southwest Airlines posted positive earnings surprises in the last three quarters, with the average being 3.64%. Also, the company's top as well as bottom line managed to beat the Zacks Consensus Estimate in the third quarter of 2015.

Southwest Airlines continues to generate profit mainly because of the present slump in oil prices , which resulted in a 99.5% rise in operating income for the carrier in the third quarter. In addition, rising travel demand coupled with a decline in ticket prices continue to drive passenger revenues.

Moreover, Southwest Airlines has decided to launch 10 new domestic as well as international routes keeping the forthcoming holiday season in mind. This is likely to boost passenger revenues further.

In the third quarter of 2015, Southwest Airlines reported strong operating results. Airline traffic, measured in billions of revenue passenger miles, increased 8.9% year over year to 31.05 billion in the quarter under review. Capacity or available seat miles increased 7.6% to 36.36 billion, while load factor (percentage of seats filled by passengers) was 85.4% compared with 84.4% in the year-ago quarter.

We are also encouraged by the company's successful integration of AirTran Airways which we believe will enhance Southwest Airlines' services while moving ahead.

Southwest Airlines currently sports a Zacks Rank #1 (Strong Buy). Other favorably ranked stocks in the same industry are Hawaiian Holdings, Inc. HA , SkyWest Inc. SKYW and Controladora Vuela Compañía de Aviación, S.A.B. de C.V. VLRS . All three companies sport a Zacks Rank #1.

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SOUTHWEST AIR (LUV): Free Stock Analysis Report

HAWAIIAN HLDGS (HA): Free Stock Analysis Report

SKYWEST INC (SKYW): Free Stock Analysis Report

CONTROLADORA VL (VLRS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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