See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Southwest Airlines Co. (LUV) - free report >>
We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Southwest Airlines Co. (LUV) - free report >>
Image: Bigstock
Southwest Airlines May Traffic Strong; RASM View Intact
Low-cost carrier Southwest Airlines Co. (LUV - Free Report) announced strong traffic numbers for May 2016, with revenue passenger miles (RPMs: a measure of air traffic) improving 6.4% on a year-over-year basis to 10.9 billion. Available seat miles (ASMs: a measure of capacity) also rose 4.6% to 12.6 billion.
Another important metric – load factor (% of seats filled by passengers) – improved 140 basis points (bps) to 85.8% during the month as traffic growth outpaced capacity expansion. Interestingly, this mark the highest ever load factor recorded by the Dallas-based airline company in the month of May.
In the first five months of 2016, Southwest Airlines generated RPMs of 49.6 billion (up 8.0% year over year) and ASMs of 60.3 billion (up 7.2%), leading to a total load factor of 82.2% (up 60 bps).
Southwest Airlines continues to expect a modest increase in operating revenue per ASM (RASM: a key measure of unit revenue) in the second quarter of 2016.
The company reported encouraging first-quarter 2016 results, wherein both the top and the bottom line surpassed the Zacks Consensus Estimate. Quarterly revenues were up 9.3% year over year to $4,826 million and also above the Zacks Consensus Estimate of $4,818 million. On a year-over-year basis, Passenger and Other revenues increased 5.3% and 101%, respectively, while Freight revenues dropped 4.5%.
Zacks Rank & Key Picks
Southwest Airlines currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the airline space include SkyWest Inc. (SKYW - Free Report) , Air France-KLM SA (AFLYY - Free Report) and GOL Linhas S.A. . Both SkyWest and Air France-KLM sport a Zacks Rank #1 (Strong Buy) while GOL Linhas carries a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>