The Dallas-based low cost carrier Southwest Airlines LUV has been making constant efforts to expand further in a bid to boost passenger revenues and improve customer satisfaction. To that end, the company has been consistently adding new routes. Moreover, Southwest has benefited from the expiration of the Wright Amendment in Oct 2014. The Wright Amendment used to govern traffic at Dallas Love Field. Its expiration has given carriers, particularly Southwest, additional opportunities to seek new markets.
In keeping with its expansion efforts, Southwest announced last week that it will fly non-stop to 8 new cities out of Dallas Love Field. The carrier will start operating the new flights from Aug 9, 2015. Following the latest expansion, Southwest‘s home base will become relatively busier with 180 departures a day from Dallas Love Field to 50 destinations across the globe.
Furthermore, another low-cost carrier, Virgin America VA, which went public late last year, is also expanding its operations at Dallas Love Field. The company, partly owned by British billionaire investor Richard Branson, announced last month that it will introduce flights from Dallas Love Field to Austin-Bergstrom International Airport in Austin, TX. The new flights will fly effective Apr 28, 2015.
Apart from the expansion move, Southwest was also in the news when it announced that it has voluntarily withdrawn 128 planes from service due to inspection-related issues. The carrier stated that it was voluntarily grounding the planes as it had failed to inspect the planes’ backup hydraulic system which controls the rudder in the event of failure of the main system (read more: Southwest Airlines Shares Fall as Planes Grounded Due to Missed Inspections).
Zacks Rank
Southwest Airlines currently carries a Zacks Rank #2 (Buy). Some other stocks worth considering in the airline space are Spirit Airlines SAVE and Hawaiian Holdings Inc. HA. Both companies sport a Zacks Rank #1 (Strong Buy).
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