Southwest Airlines Co. LUV will be offering cargo-only flights for the first time in its 48-year history as air-travel demand continues with the downward trend amid rising coronavirus concerns.
The cargo flights will be offered on a charter basis with only those needed such as the pilots and other crew members, on board. The Dallas, TX-based low cost airline will carry the freight in the bellies of its Boeing 737 aircraft.
With passenger demand plummeting, the cargo-only operations should help Southwest recoup a bit of the lost revenues. Due to significant drop in passenger bookings as a result of the coronavirus outbreak, the Zacks Rank #3 (Hold) company issued a bearish view for total revenue per available seat miles (TRASM: a key measure of unit revenues) for first-quarter 2020 (detailed results will be available on Apr 23). The carrier expects first-quarter TRASM to have either dipped 2% or increased up to 1% (previous expectation: increase in the 3.5-5.5% range) from the year-ago figure. Moreover, first-quarter operating revenues are expected to have declined between $200 and $300 million. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Due to falling demand, shares of Southwest have plunged more than 41% since the beginning of February compared with the industry’s 49.7% depreciation.
Price Performance Since February
Coming back to the cargo operations, Southwest joins the likes of American Airlines AAL, Delta Air Lines DAL and United Airlines UAL in offering the cargo-only services. American Airlines is operating two cargo-only flights from the United States to Germany. Further, Delta recently started offering cargo-only flights between Shanghai and Detroit, carrying medical supplies.
Additionally, last week, United Airlines launched several cargo-only flights, such as those from Los Angeles International Airport to Hong Kong, London and Shanghai. Freight and mail were some of the cargoes that these planes carried.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Southwest Airlines Co. (LUV): Free Stock Analysis Report
Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
United Airlines Holdings Inc (UAL): Free Stock Analysis Report
American Airlines Group Inc. (AAL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.