Now it’s Southwest Airline Co.’s (LUV - Analyst Report) turn to extend operations from Reagan National Airport (DCA) in Washington DC. Earlier this month, its rival JetBlue Airways Corp. (JBLU - Analyst Report) announced plans to expand operations from the airport. The news boosted the stock price as it ended in the green on Monday on the Nasdaq.
The additional flights will escalate Southwest’s daily departures from DCA to 44 from the current 17, thus increasing its operations from the airport more than 2.5 times. Apart from expanding Southwest’s reach to 14 destinations, the new low fare non-stop services from DCA will strengthen the carrier’s operations in the nation's capital.
Dallas-based Southwest plans to add six daily roundtrip flights from Chicago Midway Airport along with three in Nashville and two in New Orleans from Aug 10. The carrier plans to add two daily roundtrip flights from Tampa, FL along with three more from Chicago (Midway), which incidentally is Southwest’s largest focus city.
Further, in early November, the passenger carrier plans to start daily non-stop flights to three new destinations including Dallas Love Field, Arkon-Canton and Indianapolis. It will also add non-stop services in St Louis and Houston Hobby airport.
Earlier in the month, JetBlue declared the plan to add two daily flights to Charleston, Hartford apart from one daily service to Nassau and Tampa from DCA. The company also plans to add 24 daily round trip departures from DCA to eight cities in 2014.
The slot purchase is part of the mega merger between American Airlines and U.S. Airways Group Inc. – to form American Airlines Group Inc. (AAL - Snapshot Report) – which required the carriers to give up 52 take-off and landing slots at DCA and 17 pairs at New York’s LaGuardia Airport. Southwest has been the biggest beneficiary of the slot divestment as it has won 34 landing and take-off slots at New York’s LaGuardia (LGA) airport and 54 such slots at DCA.
Southwest is certainly complying with the Department of Justice (DOJ), which had earlier argued that the opening up of American Airlines and U.S. Airways slots to rival carriers will enhance accessibility at some of the busiest airports and simultaneously heighten competition.
Southwest carries a Zacks Rank #1 (Strong Buy). Another stock worth considering within this sector is Alaska Air Group Inc. (ALK - Snapshot Report), which carries the same Zacks Rank.