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Southwest Airlines (LUV) December Traffic Grows; Stock Up
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Low-cost carrier Southwest Airlines Co. (LUV - Free Report) saw its shares gain 2.07% by the close of business on Jan 10, after it announced impressive traffic numbers for Dec 2016. The company recorded a 4.2% improvement in revenue passenger miles or RPMs (a measure of air traffic) on a year-over-year basis to 10.45 billion. Available seat miles or ASMs (a measure of capacity) also improved 4.8% to 12.65 billion.
Another important metric – load factor (percentage of seats filled by passengers) – deteriorated 40 basis points (bps) to 82.6% during the month as capacity expansion outpaced traffic growth.
For full-year 2016, Southwest Airlines reported a 6.2% rise in RPMs to 124.80 billion and a 5.7% increase in ASMs to 148.52 billion, both a year-over-year basis. Total load factor increased 40 bps to 84%.
The passenger count in December and at the end of the year grew 4.5% and 5.5%, respectively.
We note that the company’s stock has comfortably outperformed the Zacks categorized Transportation-Airline industry over the last three months. The stock has gained over 28.32% compared with the industry, which has advanced just 19.42% over the same period.
Southwest Airlines continues to face competition in the airline space from peers like JetBlue Airways Co. (JBLU - Free Report) , Delta Air Lines Inc. (DAL - Free Report) , and Alaska Air Group Inc. (ALK - Free Report) .
RASM Guidance Improved
Southwest Airlines has revised its operating revenue per ASM (RASM) guidance for the fourth quarter of 2016. RASM is now expected to decline in the range of 3–4% from the fourth quarter of 2015. The earlier guidance had estimated a decline in the range of 4% to 5%. The improvement in outlook is due to better close-in yields and traffic results for December.
This apart, Southwest Airlines announced that it has appointed Thomas M. Nealon as its President and Michael G. Van de Ven as its Chief Operating Officer, effective immediately.
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>
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Southwest Airlines (LUV) December Traffic Grows; Stock Up
Low-cost carrier Southwest Airlines Co. (LUV - Free Report) saw its shares gain 2.07% by the close of business on Jan 10, after it announced impressive traffic numbers for Dec 2016. The company recorded a 4.2% improvement in revenue passenger miles or RPMs (a measure of air traffic) on a year-over-year basis to 10.45 billion. Available seat miles or ASMs (a measure of capacity) also improved 4.8% to 12.65 billion.
Another important metric – load factor (percentage of seats filled by passengers) – deteriorated 40 basis points (bps) to 82.6% during the month as capacity expansion outpaced traffic growth.
For full-year 2016, Southwest Airlines reported a 6.2% rise in RPMs to 124.80 billion and a 5.7% increase in ASMs to 148.52 billion, both a year-over-year basis. Total load factor increased 40 bps to 84%.
The passenger count in December and at the end of the year grew 4.5% and 5.5%, respectively.
We note that the company’s stock has comfortably outperformed the Zacks categorized Transportation-Airline industry over the last three months. The stock has gained over 28.32% compared with the industry, which has advanced just 19.42% over the same period.
Southwest Airlines continues to face competition in the airline space from peers like JetBlue Airways Co. (JBLU - Free Report) , Delta Air Lines Inc. (DAL - Free Report) , and Alaska Air Group Inc. (ALK - Free Report) .
RASM Guidance Improved
Southwest Airlines has revised its operating revenue per ASM (RASM) guidance for the fourth quarter of 2016. RASM is now expected to decline in the range of 3–4% from the fourth quarter of 2015. The earlier guidance had estimated a decline in the range of 4% to 5%. The improvement in outlook is due to better close-in yields and traffic results for December.
This apart, Southwest Airlines announced that it has appointed Thomas M. Nealon as its President and Michael G. Van de Ven as its Chief Operating Officer, effective immediately.
Zacks Rank and Stock to Consider
Southwest Airlines currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>