loveislost7M8

SWA is getting kicked in the NUTS!

Overview

Based in Dallas, TX, Southwest Airlines (LUV Quick QuoteLUV - Free Report) is a low-cost airline provider mainly servicing the United States and “ten near-international” markets. Southwest provides short-haul, high-frequency, point-to-point, low-fare services. The company’s point-to-point route structure includes services to and from many secondary or downtown airports such as Dallas Love Field, Houston Hobby, Chicago Midway, Baltimore-Washington International, and Ft-Lauderdale-Hollywood.

LOW COST = LOW PERFORMANCE

Low-cost carriers like Spirit Airlines (SAVE Quick QuoteSAVE - Free Report) and Southwest Airlines have been dramatically underperforming their larger peers such as United Airlines (UAL Quick QuoteUAL - Free Report) .

What is Behind the Underperformance?

Unprofitable and moving in the wrong direction: In Q4, Southwest Airlines swung to a loss for the first time in three quarters. The 38-cent loss was wider than the Zacks Consensus Estimate of 3 cents. Adding to the disappointment, Southwest earned 14 cents a year ago.

Operational Disruptions: Massive flight cancellations due to extreme winter weather conditions adversely impacted Southwest’s operations. Because Southwest is more focused on one part of the globe when compared to its larger counterparts, the company suffered more. Nearly 17,000 flights were cancelled in the last ten days of 2022 – equating to a pre-tax negative impact of approximately $800 million.

In Fighting & Bad Publicity: Southwest is known and loved by its customers because of the laid-back nature of its flight attendants and employees. This laissez faire attitude is that Southwest management has found that many customers appreciate a less stuffy environment. However, that may change soon. Southwest management and some 18,000 union workers have been in a contract dispute for months. In an era where workers are in high demand, this is not an encouraging sign for Southwest. Until management and the union come to an agreement, the stock is likely to be under pressure. Furthermore, even if an agreement is reached, the low-cost carrier will likely face reputational damage and low employee morale.

Margins are Being Squeezed: Rising fuel and labor costs are causing Southwest’s financial efficiency to take a significant hit. In fact, LUV’s return-on-equity of 6.7% pales in comparison to the S&P 500 Index’s 26.2%.

Relative Weakness: When it comes to the stock market, price action = truth. Over the past six months, United Airlines is up 41.0%, while Southwest is down 10.4%

https://www.zacks.com/commentary/205...c0a1efce84e2c0

Cyio

Bob can tell us how much he luvs us all he wants, but until they start making changes that are employee, customer and quality first this wont end for them. The curtain has been pulled and everyone can see how the operation was really run and until there are fundamental changes, I dont think Wall Street is going to give them the benefit of the doubt.

majorpilot

All one has to do is watch an All In The Family (or almost any 70s sitcom) or 50s teen angst movie to experience this stupid “kids today” nonsense. And go back and read literature or the classics however far back you choose: the “youngsters” are always an easy target for the older and empowered. Just stop…we were the same decades ago when we were young, and the old farts criticized us. Stop generalizing, step back, open ears and minds to the bigger picture. I for one have learned that maybe paying more attention to what ended up being important v. what I thought was important at 25 would have been a good idea. If a 25 year old has figured that out today, good for them! Who am I to criticize? Grow up!

hoover

are you not literally criticizing in your last sentence?
But who am I to judge?

loveislost7M8

2% letter in the mail for us peasants...

Mozam

No worries, BJ and GK are getting their multi million dollar bonuses. That is all I care care about ,they do such a great job running this airline . They deserve every penny they are getting.


Now get back to work plumer . This company would be a much better place without the pilots.

Fly4FunAA

If you’re a first year 28yr old FO at SWA, with CJOS from the big 3, and if bases were not a factor, which would you choose and why?

Stitches

United, followed closely by Delta. I wouldn’t even consider AA for a 37 year career given their finances & debt ratio.

United has more wide body opportunities and destinations. Delta is a better run company but they have hired over 5000+ pilots under the age of 40 since 2014 according to my Delta buds.

Crockrocket95

Whichever one has a base where you live.

LAXtoDEN

I thought American was finally paying down their debt while United with their massive order is taking on more debt. I believe United now has more long term debt that American.