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Southwest Airlines Co. (LUV)

  • Wed, Aug. 26, 1:58 PM
    • Southwest Airlines (NYSE:LUV), Spirit Airlines (NASDAQ:SAVE), and PE-owned Frontier Airlines are the three airlines firing off the largest fare promotions, according to analysis from Associated Press.
    • Airline fares fell last month, although the decline was magnified by large cuts in markets with overcapacity.
    • Analysts note the combination of sustained lower oil prices and the increase of efficient planes give airlines some room to drop rates without wrecking margins.
    • Previously: Airline fares fall sharply in July (Aug. 19)
    | 1 Comment
  • Wed, Aug. 19, 3:35 PM
    • Airline stocks are mixed on the day as investors digest the net impact of another drop in oil prices against the Commerce Department's read that air fares fell almost 6% in July.
    • Some analysts think the group is getting less of a bounce from the new swing low in jet fuel costs due to concerns on revenue metrics.
    • Air fares are expected to drop through the summer due in part to a seasonal trend, although today's reported drop for July has been taken lightly by some who see the government's methodology as lacking accuracy.
    • Allegiant Travel (ALGT -1.1%) and Spirit Airlines (SAVE -1.0%) are the largest decliners in the sector today, while Southwest Airlines (LUV +0.9%) and Virgin America (VA +0.2%) are the only gainers.
    • Related ETFs: JETS.
    • Previously: Airline fares fall sharply in July (Aug. 19)
  • Wed, Aug. 19, 9:19 AM
    • Airlines fares fell 5.6% M/M in July to mark the sharpest drop in the index since December 1995, according to the Bureau of Labor Statistics.
    • The average fare was also 5.6% lower than the level from a year ago on an unadjusted basis.
    • Lower jet fuel expenses and an increased focus on price collusion in the sector are both in the background.
    • Related stocks: LUV, UAL, DAL, AAL, JBLU, ALK, HA, SAVE, ALGT, RJET, VA, SKYW.
    • Related ETF: JETS.
    • BLS CPI data
  • Mon, Aug. 17, 3:41 PM
    • Southwest Airlines (LUV +2.7%) faces a FAA fne of $325K for operating a 737 that wasn't in full compliance with regulations.
    • The issue arose out of an inspection in El Salvador in which the FAA determined a plane was in use for 4,831 flights beyond the threshold for which it needed a permanent repair.
    • The company has requested a meeting with the FAA to discuss the issue.
    • FAA press release
  • Fri, Aug. 14, 9:16 AM
    • Airline stocks are on watch as U.S. crude oil prices hit their lowest level in six years.
    • The sector hasn't rallied with the same vigor as it did with previous swings lower in oil which has some analysts calling for a delayed rally.
    • Though many companies left some savings on the table due to hedging activity, fuel cost per mile flown ranged lower by 20% to 45% in the sector during Q2.
    • Earlier this week, Raymond James pitched the case that airlines will use fare increases to cover rising labor costs, leaving fuel expense savings for balance sheet moves.
    • Related stocks: DAL, UAL, AAL, SAVE, RJET, HA, ALK, JBLU, VA, ALGT, LUV.
    • Related ETF: JETS.
  • Tue, Aug. 11, 8:14 AM
    • Southwest Airlines (NYSE:LUV) reports revenue passenger miles increased 8.2% to 11.5B in July.
    • Capacity was 7.0% higher at 13.1B available seat miles.
    • July load factor +100 bps to 87.7% to mark a record for the carrier.
    • YTD load factor +80 bps to 83.3%.
    • The company estimates operating revenue per available seat mile will fall 1.0% in Q3.
    • LUV +0.32% premarket to $37.91.
    | Comment!
  • Fri, Jul. 31, 1:27 PM
    • U.S. airline companies generated net income of over $5.7B in Q2 off of operating revenue that was roughly in-line with the level from last year.
    • Analysts expect the benefit of lower fuel prices and the high level of ancillary fee growth to continue into Q3 and Q4. While regulatory pressure may be dialed up with a collusion probe hanging over the sector, efficiency is seen firming up as strategic capacity growth feeds revenue.
    • Share prices haven't quite kept up with profit growth across much of the sector on skittish reactions by some investors to ongoing developments (hacking, labor, flight disruptions, PRASM guidance).
    • Forward P-E ratios below 10: American Airlines Group (NASDAQ:AAL), United Continental (NYSE:UAL), Delta Air Lines (NYSE:DAL), Hawaiian Holdings (NASDAQ:HA), Virgin America (NASDAQ:VA), Republic Airways (NASDAQ:RJET), SkyWest (NASDAQ:SKYW), Southwest Airlines (NYSE:LUV).
    • Forward P-E ratios below 10-15: JetBlue (NASDAQ:JBLU), Alaska Air Group (NYSE:ALK), Spirit Airlines (NASDAQ:SAVE).
    • Forward P-E ratios +15: Allegiant Travel (NASDAQ:ALGT).
    • Related ETF: JETS.
  • Thu, Jul. 30, 2:42 PM
    • Southwest Airlines (NYSE:LUV) declares $0.075/share quarterly dividend, in line with previous.
    • Forward yield 0.82%
    • Payable Sept. 10; for shareholders of record Aug. 20; ex-div Aug. 18.
    | Comment!
  • Thu, Jul. 30, 6:56 AM
  • Sat, Jul. 25, 12:31 PM
    • Airlines stocks ended the week on a down note, despite record profits being reported by American Airlines Group (NASDAQ:AAL), United Continental (NYSE:UAL), and Southwest Airlines (NYSE:LUV).
    • Investors kept their sharp focus on key metric PRASM (passenger revenue per available seat mile) by turning skittish when American execs warned fare pressure will keep PRASM growth negative into 2016.
    • Fares fell in May and June on an unadjusted basis as reported by the BLS, but perhaps an even bigger eye-opener was the 19% drop reported by Spirit Airlines (NASDAQ:SAVE) on average ticket revenue per flight segment - a sign of promotional pressure.
    • Regulatory pressure also continues to be a larger factor. The DOT is now probing Delta Airlines (NYSE:DAL), United Continental, Southwest Airlines, and Jetblue (NASDAQ:JBLU), for possible price-gouging following the Amtrak train crash in Philadelphia. That follows a broader DOJ investigation into capacity growth collusion.
    • Hedging: Though lower fuel costs continue to a major tailwind, some airlines were burned by increasing hedging activity too quickly. No-hedging American reported a 38.5% drop in fuel per available seat mile in Q2, while United Continental had to absorb a $118M hedging loss which lowered its consolidated fuel expense savings to 32% Y/Y. United said it's building up a small hedge heading into 2016 (UAL earnings call transcript).
    • Related stocks: HA, ALK, ALGT, VA, RJET.
    • Related ETF: JETS.
  • Fri, Jul. 24, 3:44 PM
    • Flight attendants at Southwest Airlines (NYSE:LUV) rejected a labor contract offer from the company.
    • The proposed deal, which called for higher wages and new work rules, was voted down by a wide margin.
  • Thu, Jul. 23, 9:15 AM
  • Thu, Jul. 23, 7:31 AM
    • Southwest Airlines (NYSE:LUV) says it generated record GAAP operating income of $1.1B in Q2.
    • Passenger revenue was up 2.1% to $4.852B, while freight revenue was 4.6% higher at $46M.
    • Wages and benefit expenses +14.3% to $1.61B.
    • Fuel savings were significant during the quarter with the economic fuel cost dropping 33% to $2.02 per gallon.
    • Average passenger fare -3.4% to $157.51.
    • Load factor +70 bps to 84.6%.
    • Passenger revenue per available seat mile -4.6% to $0.1330.
    • Return on invested capital (ex-taxes and special items) jumped to 28.2% from 17.1% a year ago.
    • Previously: Southwest Airlines beats by $0.01, misses on revenue
    • LUV +3.16% premarket to $36.23.
  • Thu, Jul. 23, 7:16 AM
    • Southwest Airlines (NYSE:LUV): Q2 EPS of $1.03 beats by $0.01.
    • Revenue of $5.11B (+2.0% Y/Y) misses by $30M.
    • Press Release
    | 1 Comment
  • Wed, Jul. 22, 5:30 PM
  • Fri, Jul. 17, 8:48 AM
    • Airline fares rose 2.0% Y/Y in June on a seasonally adjusted basis, according to the Bureau of Labor Statistics.
    • The average fare was 1.3% lower than the level from a year ago on an unadjusted basis.
    • The increase in fares for the month follows a 5.7% jump in May.
    • There's a bit of a balancing act with fares for airlines amid a DOJ probe on collusion. Though heavyweight industry execs are looking for fare stabilization and controlled capacity increases, they are very likely to keep a tight rein on their public comments. Most analysts don't think there is a smoking gun on collusion similar to the infamous taped conversations between Braniff and American execs in the 1980s.
    • Related stocks: LUV, UAL, DAL, AAL, JBLU, ALK, HA, SAVE, ALGT, RJET, VA, SKYW.
    • Related ETF: JETS.
    • BLS CPI data
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Company Description
Southwest Airlines Co is an operator of passenger airline that provides scheduled air transportation in the United States and international markets.
Sector: Services
Country: United States