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Southwest Airlines Co. (LUV)

- NYSE
  • Thu, Jan. 22, 9:08 AM
    • Southwest Airlines (NYSE:LUV) reports passenger revenue rose 2.6% on a unit basis to 44.4B in Q4.
    • The company's load factor improved 160 bps Y/Y to 82.0% as revenue passenger miles outpaced capacity gains.
    • Average stage length +2.6% to 722 miles.
    • Average airfare +1.3% to $158.06.
    • Freight revenue +12.2% to $46M.
    • Economic fuel costs fell 14.1% Y/Y to $2.62 per gallon inclusive of settled hedges.
    • LUV +4.61% premarket to $43.76.
    | 3 Comments
  • Thu, Jan. 22, 8:32 AM
    • Southwest Airlines (NYSE:LUV): Q4 EPS of $0.59 beats by $0.04.
    • Revenue of $4.63B (+4.5% Y/Y) beats by $40M.
    • Shares +3.97% PM.
    • Press Release
    | 1 Comment
  • Wed, Jan. 21, 5:30 PM
  • Tue, Jan. 20, 7:41 AM
    • U.S. airlines are expected to return more cash to shareholders this year and pay down debt with the money saved from lower fuel expenses.
    • The carriers may also use the improvement on their balance sheet to push for better financing terms on new aircraft purchases.
    • A significant drop in airfares is lower on the list with demand in the U.S. at a strong level.
    • Related stocks: VA, LUV, UAL, DAL, AAL, JBLU, ALK, HA, SAVE, ALGT, RJET.
    • Previously: Airline math: Jet fuel down 30%, fares down 5% (Jan. 16 2015)
    | 5 Comments
  • Sat, Jan. 17, 8:25 AM
    • Cowen analysts this week offered a how-to guide for playing the oil price fluctuation, identifying more than 60 stocks that could benefit in a declining oil price environment.
    • Among the various nuggets of wisdom, the report notes that given the minimal contribution of petroleum to U.S. electricity generation, there is little, if any, displacement of coal burn; within the coal sector, lower crude prices mean lower diesel fuel prices, which Cowen thinks favors the operating cost structure of surface mining producers in the Powder River Basin, particularly Arch Coal (NYSE:ACI) given its diesel hedge strategy which protects it from elevated diesel levels and enables it to benefit fully in the downside of fuel costs.
    • Also best able to cope with falling oil prices: ARLP, CLD, CNX, FELP, HNRG, JEC.
    • Among airlines, American (NASDAQ:AAL) should not suffer the cost headwinds related to mark-to-market hedge losses, unlike peers that hedge jet fuel; Delta (NYSE:DAL) can expect a $2B hedge-related loss, Southwest (NYSE:LUV) should see a $500M loss and United (NYSE:UAL) a $200M loss.
    • Cowen thinks consumers are on pace for 2015 gas savings of $100B-$150B, but the upside will not be distributed equally among retailers; the firm sees broadline retailers, namely Wal-Mart (NYSE:WMT) and Target (NYSE:TGT), as best positioned to benefit from gas deflation.
    | 18 Comments
  • Fri, Jan. 16, 9:43 AM
    | 29 Comments
  • Fri, Jan. 16, 3:15 AM
    • As of today, Americans will be able to visit Cuba without first seeking a license from the Treasury Department, so long as the travel meets certain criteria.
    • Reacting to the news yesterday, United Airlines (NYSE:UAL) announced that it planned to seek approval to begin regular service to Cuba from Newark and Houston. Other airlines expressed similar interest.
    • What remains unclear is how such an agreement might comply with the 54-year-old U.S. trade embargo, which can only be lifted by Congress and generally prohibits American companies from doing business in Cuba.
    • The closed-end Caribbean Basin Fund CUBA is up 0.9% in after-hours trade.
    • Related tickers: LUV, AAL, SAVE, RCL, NCLH, CCL,
    | 7 Comments
  • Thu, Jan. 15, 2:55 PM
    • Southwest Airlines (LUV -0.8%) was hit with the largest fine ever doled out by the DOT for a tarmac delay last January.
    • Passengers were stuck on Southwest airplanes for much longer than the allowed 3-hour tarmac limit.
    • The fine amount was $1.6M.
    | 3 Comments
  • Tue, Jan. 13, 7:58 AM
    • Cowen Research's Helane Becker takes a positive view on pricing in the airline sector for 2015 on her view domestic demand will stay strong enough to keep the pressure off of airlines to drop fares.
    • A gauge of recent comments by airline execs seems to indicate the analyst is correct and airfares will be held largely level - despite the sharp drop in oil prices.
    • Delta Air Lines CEO: "It’s wonderful that fuel has run down–we love it. There’s a $2 billion opportunity out there if we hold fare levels constant."
    • American Airlines Group CEO: "...we don’t have plans to go off and just proactively cut fares."
    • Southwest Airlines CEO: "What I would not want to do to customers is take them through the same volatile ride with fares [as 2008], lowered in one day, raised in the next day."
    • U.S. carriers: LUV, UAL, DAL, AAL, JBLU, ALK, HA, SAVE, ALGT, RJET, VA.
    | 10 Comments
  • Mon, Jan. 12, 9:15 AM
    • Southwest Airlines (NYSE:LUV) reports passenger revenue miles increased 2.8% to 9.0B in December.
    • The pace was a shade below the 2.9% increase in capacity during the month.
    • Load factor -10 bps to 82.7%.
    • LUV -0.8% premarket.
    | 2 Comments
  • Wed, Jan. 7, 2:25 PM
    • Despite the brisk rally in airline stocks, Credit Suisse thinks there is plenty of upside still left.
    • "The market has been hesitant to fully price in benefits from the rapid fuel decline and consensus has yet to fully adjust for lower fuel," reads the optimistic CS note.
    • Analysts with the firm tap United Continental (NYSE:UAL) as their top sector pick.
    • Airline stocks: LUV, DAL, AAL, JBLU, ALK, HA, SAVE, ALGT, RJET, VA.
    | 22 Comments
  • Mon, Jan. 5, 3:18 PM
    | 15 Comments
  • Thu, Jan. 1, 2:19 AM
     
    | 17 Comments
  • Dec. 31, 2014, 10:07 AM
    • Airline stocks are in rally mode again off of momentum driven by the latest slide in oil prices.
    • Southwest Airlines (LUV +2.2%) is poised to end the year as the top performing stock of the S&P 500 Index with a +125% rip.
    • Though jet fuel hedging strategies vary widely throughout the sector, a prolonged period of lower oil prices will allow all carriers to realize a benefit.
    • Gainers: Republic Airways (NASDAQ:RJET) +4.4%, United Continental (NYSE:UAL) +2.4%, Virgin America (NASDAQ:VA) +1.9%, JetBlue (NASDAQ:JBLU) +1.8%, Alaska Air Group (NYSE:ALK) +1.7%, Allegiant Travel (NASDAQ:ALGT) +1.6%, Delta Air Lines (NYSE:DAL) +1.6%, SkyWest (NASDAQ:SKYW) +1.4%.
    • Previous: Hedging strategies by airline
    | 2 Comments
  • Dec. 30, 2014, 12:53 PM
    • AirTran Airways flew its last flight earlier this week as Southwest Airlines (LUV +1%) completed the integration of the airline purchased in 2011.
    • The carrier has used old AirTran routes as a launching pad for Southwest to grow into international territories.
    | Comment!
  • Dec. 23, 2014, 10:06 AM
    • The type of hedging strategies used by airliners will play a big part in profitability in the sector after the sharp drop in jet fuel prices.
    • Delta Airlines (NYSE:DAL) estimates it keeps about 65% of the drop in fuel costs, but will owe $800M to counterparties (the other side of the hedge) if oil is 20% lower on December 31, 2015 from where it stood on October 1, 2014. By Delta's estimation, a penny drop in oil prices is a net $40M to the good side.
    • Southwest Airlines (NYSE:LUV) forecasts it will reap $0.80 for every $1 drop in oil prices, but disclosed a $615M liability to creditors if crude oil prices stay below 25% from the level of September 30.
    • American Airlines Group (NASDAQ:AAL) will realize the full impact from the drop in fuel costs on its bottom line due to the decision by the company not to hedge at all.
    • Other airliners could also have some hedging exposure, although details are light on the strategies employed in the sector.
    • What to watch: Q1 reports and conference calls in the sector could be key in filling in some of the blanks.
    • Related stocks: UAL, JBLU, ALK, HA, SAVE, ALGT, RJET, VA.
    | 23 Comments
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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