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Southwest Airlines Co LUV

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Morningstar’s Analysis

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Southwest Is Attempting to Take Market Share in U.S. While the Airline Industry Is in Distress

Burkett Huey, CFA Equity Analyst

Analyst Note

| Burkett Huey, CFA |

No-moat rated Southwest Airlines reported a difficult third quarter, as the pandemic has halted most air travel in the U.S., but it is optimistic that the nascent recovery in passenger traffic will last until a COVID-19 vaccine allows for a much more robust recovery. We are raising our fair value estimate to $44.50 per share from $44 on a slightly better near-term revenue environment and slightly lower near-term expenses, particularly fuel expense.

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Company Profile

Business Description

Southwest Airlines is the largest domestic carrier in the United States, as measured by the number of originating passengers boarded. Southwest operates over 700 aircraft in an all-Boeing 737 fleet. Despite expanding into longer routes and business travel, the airline still specializes in short-haul leisure flights, using a point-to-point network. Southwest operates a low-cost carrier business model.

P.O. Box 36611
Dallas, TX, 75235-1611
T +1 214 792-4000
Sector Industrials
Industry Airlines
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2019
Stock Type Cyclical
Employees 57,931