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Dallas, TX-based Southwest Airlines Co. (LUV - Analyst Report) posted a rise in traffic for June 2014. The month’s traffic – measured in revenue passenger miles (RPMs) – came in at 10.01 billion, up 2.2% from 9.85 billion recorded in the comparable period a year ago.

Meanwhile, on a year-over-year basis, consolidated capacity (or available seat miles/ASMs) increased 0.9% to 11.69 billion. Load factor came in at 86.1%, up 110 basis points (bps) from the year-over-year number of 85.0%. PRASM (passenger revenue per available seat miles) went up approximately 7–8% in the reported month.

In the first half of 2014, Southwest Airlines generated RPMs of 52.74 billion (up 2.0% year over year) and ASMs of 64.57 billion (down 0.7% year over year) leading to a load factor of 81.7% (up by 220 bps).

The carrier also remains optimistic about its second quarter PRASM and expects it to grow by 8%. The stock reacted positively to the figures and gained in both during the trading and after hours on Wednesday on NYSE.

Notably, after operating for several decades within the U.S. domestic market, Southwest Airlines is finally flying into international territory, with flights to the Caribbean. The carrier also announced that after the initial round of flights, it will expand its international service to Mexico and Dominican Republic.

The slot wins at the LaGuardia (LGA) airport in New York and at Reagan National Airport (DCA) in Washington, D.C. from American Airlines Group Inc. (AAL - Snapshot Report) has widened Southwest Airlines’ scope for expansion in the cities, at the same time, consolidating its foothold against peers like JetBlue Airways Corp. (JBLU - Analyst Report) and Delta Air Lines Inc. (DAL - Analyst Report).

The carrier also announced that it will now offer non-stop services to domestic destinations from Dallas Love Field airport, wherein flight limitations will finally be lifted. We believe these initiatives along with the slot wins will create tailwinds for the company going forward.

Southwest Airlines currently holds a Zacks Rank #1 (Strong Buy).

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