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Will Southwest Airlines (LUV) Website Issue Hit the Stock?
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The Christmas and year-end holiday season is the busiest time for airlines, globally. Hence, it goes without saying that technical problems during this period are the worst nightmare for both passengers and carriers. Southwest Airlines Co. (LUV - Free Report) faced a major issue on Dec 20, as its website and mobile app stopped functioning for several hours due to a glitch, per media reports.
Nonetheless, the company announced a few hours later that it had solved the issue and that its website was functional again. We believe that it is unlikely for this issue to significantly impact the company’s stock price as flights have not been cancelled but only delayed. However, if such glitches reoccur might result in stock price depreciation, especially considering the high volumes during the holiday season.
We note that Southwest’s stock has outperformed the broader Zacks categorized Transportation-Airline industry. The company 37.88% while the industry gained 16.65% over the past three months.
Impact of Issue
Per FlightAware, over 940 flights of the company were delayed on Dec 20. This accounts for 24% of the total scheduled flights. However, none of the flights were cancelled. The issue mainly affected the website and app as passengers were unable to check in, book or change flights, which resulted in delays. Passengers had to check in through Southwest Airlines’ kiosks at airports or at the counter. The airline apologized for the incident on its website and took immediate measures to ensure that the issue was resolved. The company also declared that passengers travelling with the airlines through Dec 21, would not be charged penalty for changing their travel plans.
Notably, this is the second time this year that Southwest Airlines’ operations have been impacted by technical issues. In July, the company faced a technical outage which resulted in several delays and cancellations. As a result, the company’s operating revenue per available seat mile (RASM) was impacted by 0.5 points on a yearly basis for the third quarter.
The airline faces tough competition from peers like JetBlue Airways Co. (JBLU - Free Report) , Alaska Air Group Inc. (ALK - Free Report) and Delta Air Lines Inc. (DAL - Free Report) .
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Will Southwest Airlines (LUV) Website Issue Hit the Stock?
The Christmas and year-end holiday season is the busiest time for airlines, globally. Hence, it goes without saying that technical problems during this period are the worst nightmare for both passengers and carriers. Southwest Airlines Co. (LUV - Free Report) faced a major issue on Dec 20, as its website and mobile app stopped functioning for several hours due to a glitch, per media reports.
Nonetheless, the company announced a few hours later that it had solved the issue and that its website was functional again. We believe that it is unlikely for this issue to significantly impact the company’s stock price as flights have not been cancelled but only delayed. However, if such glitches reoccur might result in stock price depreciation, especially considering the high volumes during the holiday season.
We note that Southwest’s stock has outperformed the broader Zacks categorized Transportation-Airline industry. The company 37.88% while the industry gained 16.65% over the past three months.
Impact of Issue
Per FlightAware, over 940 flights of the company were delayed on Dec 20. This accounts for 24% of the total scheduled flights. However, none of the flights were cancelled. The issue mainly affected the website and app as passengers were unable to check in, book or change flights, which resulted in delays. Passengers had to check in through Southwest Airlines’ kiosks at airports or at the counter. The airline apologized for the incident on its website and took immediate measures to ensure that the issue was resolved. The company also declared that passengers travelling with the airlines through Dec 21, would not be charged penalty for changing their travel plans.
Notably, this is the second time this year that Southwest Airlines’ operations have been impacted by technical issues. In July, the company faced a technical outage which resulted in several delays and cancellations. As a result, the company’s operating revenue per available seat mile (RASM) was impacted by 0.5 points on a yearly basis for the third quarter.
Zacks Rank
Southwest Airlines carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The airline faces tough competition from peers like JetBlue Airways Co. (JBLU - Free Report) , Alaska Air Group Inc. (ALK - Free Report) and Delta Air Lines Inc. (DAL - Free Report) .
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>