Southwest Airlines Co

Last weekend, multiple airlines canceled thousands of flights in airports across the U.S. Why is Southwest canceling flights and what can travelers expect?

Southwest Airlines CEO Bob Jordan has been working for the airline for over three decades. Jordan’s Southwest salary has grown throughout his 34-year career..

As the CEO of Southwest Airlines, one of the most successful airlines in the U.S., what is Gary Kelly's net worth?

Southwest Airlines has canceled nearly 2,400 flights since Oct. 9, 2021. You might be wondering who owns the business.

What caused Southwest flight cancellations? Let's debunk the rumors of employee walkouts due to vaccine mandates.

Fuel expense is Delta’s largest expense. It accounted for ~29% of the total operating expense in 3Q14. Fuel consumption per available seat mile decreased by 1.5% during the quarter.

The World Bank estimated Ebola’s impact by analyzing two scenarios—low Ebola and high Ebola. The scenarios are based on the probability of the disease spreading internationally.

Southwest Airlines stock has seen positive momentum lately as air travel demand is recovering. When will Southwest Airlines (LUV) restore its dividend?

Delta Air Lines’ (DAL) total traffic fell due to a computer outage. For August 2016, Delta’s traffic fell by 2.8% as compared to the 0.5% capacity growth.

Growing capacity is necessary for revenue growth. However, capacity expansion that exceeds demand growth can lead to declining utilization.

Out of the 18 analysts tracking Southwest Airlines (LUV), 11 analysts (61.1%) have a “buy” recommendation on the stock versus 71% analysts that had a “buy” recommendation on Southwest in 2Q16.

Apart from improved operational efficiencies, American has outperformed its peers in pre-tax margin (excluding special items) improvement in the first half of 2014 to 8.7% from 4.1% in the previous year.

Increases in share prices and dividends provide direct benefits to shareholders. The increases in share prices give better returns. Share repurchases and stock splits provide indirect benefits. Share repurchases lead to a reduction in outstanding shares. This results in increased EPS.

Brazil is the third largest domestic aviation market. With double-digit traffic growth, Brazil was one of the fastest-growing domestic markets in 2010 and 2011.

Capital expenditure is generally high in the airline industry. Delta manages to keep it low through its strategy of buying used aircraft.

Today, Delta is one of the largest airlines in U.S. providing transportation services for passengers and cargo—it serves almost 165 million customers each year to 225 domestic and 97 international destinations.

Since airlines across the industry have been forecast to beat record profits achieved in 2015, consumers have expected a further fall in airfares.

United achieved significant fuel cost savings during 3Q14 in the form of lower purchase costs and improved fuel efficiency.

According to the IATA, global air freight volume has increased by 4.5%. Capacity, measured by available freight ton kilometers (or AFTK), increased by 3.5% year-over-year in August 2014.

As of December 2013, JetBlue Airways (JBLU) had cash and cash equivalents of $225 million. JetBlue’s cash position has improved by 24% from $182 million in 2012.

According to a study by Expedia, airfares fell by about 5% in 2015. Despite this decline, passenger complaints are on the rise. Many consumer leaders also lobbied for airfare reductions.

Alaska’s capital expenditure (or capex) mainly includes investment on aircraft. It increased since 2010. In 2013, ~80% of the total cash used for investing activities was on capital expenditure. The total capital expenditure was $566 million. $487 million was on aircraft and aircraft purchase deposits. $79 million was on flight equipment and other property and equipment.

On Monday, Bank of America analyst Ronald Epstein lowered his target price on Boeing stock by $10 to $360. However, he maintained his “neutral” rating.

In the last week of June 2017, Qatar Airways’ CEO, Akbar Al Baker, disclosed the carrier’s interest in buying a 10% stake worth $808 million in American Airlines through the open market.

Load factor measures capacity utilization. It indicates the percentage of total capacity that an airline utilizes. Airlines are capital intensive. They have high fixed costs.

In 2013, almost 57% of United’s (UAL) $37,030 million total operating costs comprised fuel costs (33%) and salaries (23%), compared to Delta’s 46%.

For 2Q16, analysts are estimating 4.2% revenue growth for Alaska Air Group (ALK), which is slower than the 6.2% growth in 1Q16.

Growing trade activity drove the recovery in cargo traffic in emerging markets in Asia, but it was slightly offset by the slowing European economy.

Appaloosa Management significantly lowered its position in American Airlines (AAL) in the third quarter that ended in September 2014. The position accounts for 3.81% of the fund’s total third-quarter portfolio.

Alaska Airlines (ALK) has the lowest yield of $0.148 among all its peers. Its peers include Delta (DAL) at $0.1689, United (UAL) at $0.1614, American (AAL) at $0.1622, and Southwest (LUV) at $0.1602. Revenue management is essential for the airline industry. The industry needs to maximize revenue by selling the most aircraft seats possible to customers at the best price.

The Airline Deregulation Act of 1978 removed all regulations governing the airline routes, airfares, entry, and exit of commercial airlines. Earlier, this was controlled by the Civil Aeronautics Board (or CAB). Airfares and all other factors would be determined by demand and supply market forces.

Southwest outperformed all its peers. Its share price increased 2.6% to $33.77 in September. That said, year-to-date results are positive overall.

Analysts are estimating 2Q16 revenue of ~$1.7 billion for JetBlue Airways (JBLU), which is a year-over-year increase of 2.2%.

Delta’s share price increased after the release of its 3Q14 earnings on October 16, 2014. On October 13, 2014, Delta’s share price reached $30.90—the lowest level since February 2014.

American Airlines (AAL) stock rose almost 0.94% on September 12, the day of its traffic release.

Global passenger traffic has increased by 5.8% year-over-year during the first eight months of 2014. Europe (29.7%), Asia-Pacifc (29.2%), and North America (25%) comprise ~85% of global market share by passenger traffic.

Among the seven major carriers, most analysts seem to favor Delta Air Lines (DAL), which has a “buy” rating from 87.5% of the analysts.

Spirit Airlines’ EBITDA (earnings before interest, tax, depreciation, and amortization) margin is expected to fall to 24.2% in 2016, compared to 26.8% in 2015.

Delta Air Lines (DAL) stock fell 3.5% after its traffic release on September 5, 2017. The negativity has spread to other players.

Decreasing load factors across the airline industry mean that airlines are not able to fill up their seats as fast as they are adding seats. This justifies investor fears of overcapacity.

Modernization and development of airports Southwest is  involved in the management of various airport development initiatives. Few of them include Southwest entered into an agreement with Broward Country, Florida in 2013 to manage the Fort Lauderdale Hollywood International airport’s Terminal 1 modernization project. Entered into an agreement with city of Houston to expand the Houston […]

In 2013, Alaska operated a fleet of 131 Boeing 737 jet aircraft. It had contracts with Horizon, Sky West Airlines, and Peninsula Airways for regional capacity. Horizon operated 51 Bombardier Q400 turboprop aircraft. It sells all of its capacity to Alaska according to its capacity purchase agreements.

During fatal disease outbreaks, rules and restrictions are imposed—especially on air transportation. This includes canceling flights to the affected areas.

The demand for air travel experienced considerable growth in the month of August, driven by traditional vacation travel as well as lower fares of major air carriers.

For October, SAVE was ranked third on the metric according to the Department of Transportation. That’s a huge improvement since Spirit has historically been last.

JetBlue is in its growth phase and prefers to utilize its cash receipts to fund business growth and reduce debt levels. JetBlue currently pays no dividends.

Crude oil is trading below $50 per barrel, one of its lowest recent prices, and it is expected to take some time before it recovers, given the huge oversupply.

In November 2017, Southwest Airlines’ (LUV) traffic grew 3.4% year-over-year (or YoY). This growth was higher than its capacity growth of 2.5% YoY in the same month.

The airline industry is capital-intensive, with high levels of depreciation and amortization and varying degrees of debt and operating leases. To neutralize these factors, we use the EV-to-EBITDA ratio to value airline stocks.

Delta Air Lines (DAL) is the third largest domestic airline in the US. The company serves more than 170 million customers each year across the globe.

On April 4, 2016, Alaska Air Group (ALK) announced its acquisition of Virgin America for $57 per share in cash, which amounted to $2.6 billion.

Right now, 36.8% of the analysts tracking Southwest Airlines (LUV) stock have given it “strong buy” ratings. Another 52.6% of analysts have “buy” ratings on the stock.

At present, 35.3% of the analysts tracking the Southwest Airlines (LUV) stock have “strong buy” ratings, another 35.3% have “buy” ratings, and 29.4% have “hold” ratings on the stock.

The share prices for major airline companies in the U.S. dropped substantially after the news of the first Ebola case in U.S. on September 30, 2014.

Passenger yield declined by 8% year-over-year for August 2015 to 15.3 cents from 16.6 cents. This is the highest decline since the start of the year.

Currently, American Airlines (AAL), Southwest Airlines (LUV), and Alaska Air Group (ALK) are all trading at ~5x their forward EV-to-EBITDA multiples.

On multiple recent occasions, US President Donald Trump has said that the US economy is doing very well.

The S&P 500 Index, represented by the SPDR S&P 500 ETF (SPY), rose 0.3% on October 23, nearing the all-time high it saw in July.

Spirit Airlines (SAVE) is headquartered in Miramar, Florida. It’s a pioneer of ultra-low-cost carrier or ULCC airlines.

JetBlue Airways Corporation (JBLU) is the only airline stock in the industry to have gained more than 50% in 2015.

With 16,000 unique city pairs, connectivity by air is estimated to have doubled in the past two decades. Moreover, although demand continues to rise, the price of travel has fallen.

American Airlines (AAL) is now the largest airline as measured by Available Seat Miles (or ASMs) with a 26% market share.

The most recent phase of consolidation that began in 2005 has seen 13 airline mergers and acquisitions. Four of these deals are worth special mention because they changed the face of the industry.

Southwest Airlines’s (LUV) current valuation is slightly lower than its average valuation of 4.8x since October 2008.

Just a few days ago, we wrote about how Trump had received very little support from the travel industry. Now that he’s been elected, what’s next?

Alaska Air Group (ALK) currently has the highest forward EV-to-EBITDA multiple of 6.6x.

Kansas City Southern (KSU) was trading at a forward PE multiple of 19.5x, the highest in its peer group of major US railroads, on August 26, 2016.

For 1Q16, analysts estimate American Airlines’ revenues to decline by 4% to $9.4 billion and then to slow to 2% and 0.5% in 2Q16 and 3Q16, respectively.

Despite its fall in 3Q16, Spirit Airlines’ stock continues to be the best performing airline stock in 2016. The stock has risen almost 9% year-to-date.

On July 26, JetBlue reported a 2Q16 revenue increase of 1.9% YoY to ~$1.6 billion. Its EPS also jumped by a strong 20.5% YoY to $0.53 in 2Q16.

With the repeal of the Wright Amendment on October 13, 2014, the company immediately launched nonstop flights to seven destinations. This was the largest single-day expansion in Southwest’s history.

Two of AirTran’s services to San Juan and Puerto Rico were already added to Southwest’s network in April, 2014.

Second quarter 2016 estimates Analyst estimates serve as an effective proxy for gauging what’s priced into the market. For 2Q16, analysts are estimating Southwest Airlines revenues to grow by 5.7% to $5400 million. For the next two quarters, though sales are expected to grow, the growth rate in expected to slow down from 5.7% in […]

The US airline stocks are in focus as crude oil prices soar after the US assassinated a top Iranian military commander last Thursday night.

Airline financials improved drastically in the past three years. Frontier Airlines’ IPO seems to be hitting the market at the right time for its investors.

Berkshire Hathaway’s (BRK.B) November 2016 13F filing attracted considerable interest for airline investors. The 13F revealed Warren Buffett’s new investments in the airline sector—a sector he had written off during the past decade.

Delta Air Lines (DAL) derives 65.8% of its revenue from the passenger segment, 2.5% from the cargo segment, and 10.3% from other sources.

Alaska Air Group (ALK) has been trying to reduce its debt burden in order to strengthen its balance sheet in the long term.

American Airlines started paying dividends in mid-2014, joining the ranks of Delta Airlines, Southwest Airlines, and Alaska Air Group, the few dividend-paying airlines.

In this series, we’ll discuss why the ~25% share price decline since June was actually an opportunity for long-term investors to buy shares of American Airlines.

Investors should keep an eye on airfare trends. Despite a 40% fall in crude oil prices—the major cost for airlines—airfares have remained fairly stable.

Southwest Airlines (LUV) stock fell 0.66% on June 7, 2017, the day it released its traffic report. Since then, the stock has continued its downtrend and has fallen 1.9%.

Analysts are estimating an ~4.5% decline in Delta Air Lines’s (DAL) revenue to $10.6 billion for 3Q16.

After crude oil prices, labor costs are the largest part of an airline’s expenses. Pilot strikes and shortages continue to present problems.

Boeing (BA) has been feeling the heat after its 737 Max 8 aircraft crashed on March 10—the second crash in five months.

Southwest Airlines stock has suffered with other airline stocks this year due to the COVID-19 pandemic. Is the stock a buy?

Southwest Airlines stock was trading higher in the premarket on Oct. 22 after its third-quarter earnings beat. What are the key takeaways from Southwest Airlines’ earnings call?

Southwest Airlines is preparing to report its third-quarter earnings as the travel sector continues to grapple with the COVID-19 pandemic fallout.

Concerns about Ebola increased in the U.S. after September 30, 2014. Thomas Eric Duncan was the first person to be diagnosed with Ebola in the U.S.

The airline industry contributes to U.S. economic growth. The industry drives $1.5 trillion in U.S. economic activity. It also generates more than 11 million jobs in the U.S.

Delta Air Lines (DAL) is scheduled to report its first-quarter earnings results on April 10.

Delta Air Lines’ EBITDA (earnings before interest, tax, depreciation, and amortization) margins are expected to have improved to 21% in 2015 as compared to 10% in 2014.

Of the 15 analysts rating Spirit Airlines’ stock, 80% (12 analysts) have a “buy” rating, 20% (three analysts) have a “hold” rating, and none of the analysts have a “sell” rating.

The combined entity’s share in the Washington Reagan Airport (or DCA) would be as high as 68% and its share in New York LaGuardia would be 33%.

Although all operating and performance metrics of AAG has shown improvement after the merger, leverage is one area that needs considerable improvement.

UAL’s consensus 12-month target price is $77.38, which indicates a 65.6% return potential.

In 1Q17, Alaska Air Group’s (ALK) EBITDA (earnings before interest, tax, depreciation, and amortization) is expected to fall 5.8% to $385 million.

Southwest Airlines (LUV) shares gained over 5% last week, which helped the stock end the first quarter with a cumulative gain of 11.7%.

Delta’s (DAL) fuel price per gallon of $2.93 in 2Q14 was the lowest among its peers—all of its competitors including American (AAL), United (UAL), Southwest (LUV), and JetBlue (JBLU) had a fuel price per gallon between $3.02 and $3.09.

JetBlue’s operating income grew to $253 million for 1Q15, representing enormous growth from 1Q14’s $41 million in operating income.