On Nov 26, 2014, we issued an updated research report on Southwest Airlines Co. ( LUV ). Low fuel prices coupled with increased demand for air travel will continue to boost profits for the company.
Southwest Airlines has delivered positive earnings surprises over the last four quarters, with an average beat of 12.22%. The company reported strong financial results for the third quarter of 2014 with both the top and the bottom line beating the Zacks Consensus Estimate.
After operating for several decades within the U.S. domestic market, Southwest Airlines initiated its international service in Jul 2014 with flights to Aruba, Bahamas and Jamaica in the Caribbean. After the initial round of flights, the carrier plans to expand its international operations to 50 international destinations with Mexico and Dominican Republic being next.
To combat further cost increases, Southwest Airlines is rightsizing its fleet. Though initially expensive, it seems to be the most apt strategy to lower non-fuel costs. The company is also several efforts to enhance the quality of its fleet so as to improve profitability. Southwest Airlines is replacing AirTran's Boeing 717s with 737-800 and presently has 47 such aircraft in its fleet. This is allowing the company to improve revenues along with reducing unit cost.
Southwest Airlines is also offering Row 44 WiFi technology-based facilities including Live Television, satellite-based WiFi and on-demand movies to passengers on all Southwest Next Generation fleet (737-800s and 737-700s). Recently, the company started offering Beats Music service to flyers on Wi-Fi which we believe will further enrich the in-flight entertainment quotient. Additionally, Southwest has ordered 33 new The Boeing Company ( BA ) Boeing 737-800s and plans to add 17 used Boeing 737-700s in its fleet in the future. On Jul 9, 2012, Southwest had entered into an agreement with Delta Air Lines, Inc. ( DAL ) to lease or sublease all 88 of AirTran's Boeing 717s, and has switched over 36 such aircraft to Delta at the end of the second quarter.
Southwest Airlines currently sports a Zacks Rank #1 (Strong Buy) while another stock having same Zacks Rank is American Airlines Group Inc. ( AAL ).
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SOUTHWEST AIR (LUV): Free Stock Analysis Report
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Source: southwest - Yahoo News Search Results http://ift.tt/1w0u80q
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