Back to top

Southwest Airlines' December Traffic Up, Load Factor Falls

Read MoreHide Full Article

Southwest Airlines Co. (LUV - Free Report) posted mixed traffic numbers for December 2018. In spite of traffic increasing on the back of strong demand for air travel, load factor declined as traffic growth was outweighed by capacity expansion.

Traffic (measured in revenue passenger miles or RPMs) rose 3.3% to around 11.07 billion, while capacity or available seat miles (ASMs) expanded 5.4% to 13.56 billion.

However, load factor (percentage of seats filled by passengers) declined 170 basis points (bps) to 81.6% in the month as traffic growth was outpaced by capacity expansion. Additionally, passenger count grew 2.1% to 13,619,622.

At the end of 2018, Southwest Airlines witnessed a 3.3% rise in RPMs to 133.32 billion. Also ASMs rose 3.9% to 159.8 billion. As a result, the load factor contracted 50 bps to 83.4%.

In spite of the increase in December traffic, the low-cost carrier has been struggling against capacity-related woes of late. We believe that Southwest Airlines is perhaps reeling under the effects of the flight 1380 incident in April. Ever since the incident, the carrier has reported a decline in load factor every successive month, which does not bode well.

Zacks Rank & Stocks to Consider

Southwest Airlines carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the Zacks Transportation sector are Spirit Airlines, Inc. (SAVE - Free Report) , Azul S.A. (AZUL - Free Report) and Frontline Ltd. (FRO - Free Report) . While Frontline carries a Zacks Rank #2 (Buy), Spirit Airlines and Azul sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Frontline, Spirit Airlines and Azul have gained 5.5%, 52.5% and 70.6% in the past six months, respectively.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>




 




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Southwest Airlines Co. (LUV) - free report >>

Spirit Airlines, Inc. (SAVE) - free report >>

Frontline Ltd. (FRO) - free report >>

AZUL SA (AZUL) - free report >>

More from Zacks Analyst Blog

You May Like

Published in