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Dallas, Texas-based Southwest Airlines Co. (LUV - Analyst Report) witnessed improvements in traffic and capacity in Jun 2013, supported by perked up activities across the network.

The company’s traffic – measured in revenue passenger miles (RPMs) – was 9.85 billion for the reported month, up 2.3% from 9.62 billion recorded a year ago. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) moved up 1.7% to 11.59 billion. The load factor or percentage of seats filled by passengers improved marginally to 85.0% from 84.4% in Jun 2012.

For the first half of this year, Southwest generated RPMs of 51.69 billion (up 1.6% year over year) and ASMs of 65.03 billion (up 1.8% year over year). Load factor was 79.5%, reflecting a decline of 20 basis points.

We find Southwest focused on a number of initiatives to increase revenues and reduce costs over the next couple of quarters. These include the customer-friendly programs, profitable collaborations and network optimization.

The company is also adding novel features to its services as well as introducing new products, which are enhancing its value and profitability. Recently, Southwest entered into a deal with Dish Network Corp. (DISH - Analyst Report) to provide the flyers of the airline free live television service on their own Internet devices including phones, tablets or laptops.

The U.S. low-cost carrier will report its second quarter 2013 financial results on Jul 25, 2013, before the opening bell. The Zacks Consensus Estimate for earnings currently stands at 39 cents per share for the quarter. The estimate reflects a year-over-year growth of 7.9%.

Southwest – which operates along with other prominent players such as United Continental Holdings (UAL - Analyst Report) and JetBlue Airways (JBLU - Analyst Report)) – currently holds a Zacks Rank #3, implying a Hold rating.

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