Add a New Bears Reason

Company: Southwest Airlines Company (LUV)
Current price:
Headline: (100 character max)
Analysis:
Cancel
59%
agree
156 votes

  Southwest's Fuel Hedges are Decreasing

Southwest's hedging contracts extend until 2012, although the amount of oil hedged drops steadily after 2009, with only 15% of its oil needs in 2012 hedged at $63 per barrel. As a result, Southwest will become more vulnerable to fluctuations in fuel prices as its contracts mature.

(100 character max) Cancel
38%
agree
13 votes

  US Airways lowest fares.

The assumption Southwest has the lowest fare is misplaced. Compare fares and you find US Airways lower in most markets

(100 character max) Cancel
29%
agree
27 votes

  No longer the only low-cost carrier in the U.S. market

No longer the only low-cost carrier in the U.S. market, Southwest faces increasing competition from newer low-cost carriers, such as JetBlue, Virgin America and Skybus. These newer airlines may have fewer legacy costs, such as pensions, than Southwest.

(100 character max) Cancel
18%
agree
22 votes

  No-layoff policy will lead to trouble

LUV has kept a no-layoff policy for decades.[1] After almost 600,000 American jobs were cut in January 2009,[1] Southwest essentially has two options:

  • Keep its no layoff policy and maintain capacity levels that will not be met by consumer demand throughout 2009. The company will struggle to stay afloat as its expenses will easily outweigh revenues.
  • Throw away the policy and ruin one of the best airline-union relationship in the industry. Southwest has been able to perform incredibly well because of its relationship with its union and the company would have to find a new way to distinguish itself from other discount airlines.

Either way, LUV's no-layoff policy will lead to trouble for the company regardless of whether they keep it or not.

(100 character max) Cancel
29%
agree
37 votes

  Labor unions are demanding pay increases at the wrong time

The current standstill between the TWU-555 (Transport Workers Union) and Southwest Airlines is only creating a deeper negative image on a company who has provided a secure future for all of it's employees throughout the past 37+ years. Investors need to have confindence that LUV's bottom line is not increased especially during these challenging economic times.

(100 character max) Cancel
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki