Competition
Southwest competes against many low-cost carriers or low-cost subsidiaries of larger carriers. Southwest's main low-cost carrier competitors are AirTran Holdings (AAI) and JetBlue Airways (JBLU). Its other competitors include American Airlines (AMR) (in Chicago, Texas, Los Angeles, and Miami), Continental (CAL) (in Cleveland and Houston), United (UAUA) (in Los Angeles, San Francisco, Portland, Chicago, and Washington, D.C.), and US Air (LCC) (in Baltimore, Phoenix, and Las Vegas). Because of its efficient cost-saving strategies, Southwest's 36 year streak of profitability is unmatched in the airline industry.[1] Additionally, due to rising costs and slumping demand, many competitors implemented various strategies including cutting food and beverage services and charging customers extra fees for checking in baggage to improve their profitability in 2008.[2] However, because of its already low operating expenses, Southwest has not instituted these cost-cutting measures.[2] Southwest is compared to these competitors along key metrics in the table below.
| Airline
| Fleet Size[3]
| Annual Departures (2007) (Thousands)[3]
| Available Seat Miles (Millions)[3]
| Passengers Enplaned (Thousands)[3]
| Fuel Cost per Gallon[4]
| Cost per Available Seat Mile (CASM)[3]
| 2007 Revenue (Millions)[3]
| Operating Margin[3]
| Net Income (Millions)[3]
|
| AirTran Holdings (AAI)
| 137
| 262
| 22,680
| 23,741
| $2.23
| $.0957[5]
| $2,309
| 5.9%
| $52
|
| American Airlines (AMR)
| 892
| 769
| 169,856
| 98,165
| $2.12
| $.114[6]
| $22,833
| 3.1%
| $356
|
| Continental Airlines (CAL)
| 365
| 411
| 99,061
| 48.974
| $2.18
| $.108[7]
| $14,105
| 4.4%
| $460
|
| Delta Air Lines Inc. (DAL)
| 446
| 553
| 127,323
| 72,924
| $2.24
| $.119[8]
| $19.239
| 5.2%
| $579
|
| JetBlue Airways (JBLU)
| 134
| 196
| 32,148
| 21,304
| $2.09
| $.0838[9]
| $2,843
| 6.0%
| $18
|
| Southwest Airlines Company (LUV)
| 537[10]
| 1,191,151[10]
| 103,271,343[10]
| 101,920,598[10]
| $2.44[10]
| $.091[11]
| $11,023[10]
| 8%
| $178[10]
|
| United Airlines (UAUA)
| 460
| 551
| 141,838
| 68,362
| $2.18
| $.135[12]
| $20,049
| 4.8%
| $349
|
| US Airways Group (LCC)
| 356
| 525
| 75,790
| 57,829
| $2.20
| $.113[13]
| $12,055
| 4.3%
| $350
|
Introduction and Overview | Valuation and Trends | Competition
References
- ↑ LUV 2008 10-K, Item 7, pg. 20
- ↑ 2.0 2.1 "Big Airlines Cut Service And Add Fees" NY Times 11/2/2008
- ↑ 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 Air Transport Association 2008 Economic Report Pg. 23
- ↑ Wikinvest Fuel Cost per Gallon Page
- ↑ AAI Wikinvest Page
- ↑ AMR Wikinvest Page
- ↑ CAL Wikinvest Page
- ↑ DAL Wikinvest Page
- ↑ JBLU Wikinvest Page
- ↑ 10.0 10.1 10.2 10.3 10.4 10.5 10.6 LUV 2008 10-K, Item 6, pg. 19
- ↑ LUV 2007 10-K, Item 6, pg. 17
- ↑ UAUA Wikinvest Page
- ↑ LCC Wikinvest Page
