Southwest Airlines Survives Rising Oil Prices
Not too many airline services give top-notch service like Southwest Airlines (LUV) and despite oil prices reaching their highest prices in history , Southwest still doesn’t sacrifice service to increase their profit margin.
Rising oil prices have affected nearly every company in the transportation sector. Southwest Airlines’ stock price especially suffered a decline of more than roughly 27% from their 52 week high of $12.04.
However, there are many reasons to stick with Southwest Airlines as a successful business. First, Southwest is adding larger, more fuel efficient, planes. This means that more travelers will be able to board each plane than they could on older models while still spending the same amount of fuel for each trip. The airline also will not have to buy as much fuel for every single plane.
There are still many concerns about the Southwest Airlines. The corporation had to delay the delivery of 30 of its new fuel-efficient aircraft for about four years. The airline is extending a cap on its fleet size and is also trying to cut expenses so that it can remain profitable.
Still, the Texas-based corporation is taking a major step forward by adding over 100 new Boeing 737-800 airplanes. This is a large order of planes that can bolster Southwest by catering to a greater number of frequent fliers and travelers. It also equips the company with efficient technology, so that it will be less reliant on fuel in the future.
Southwest has a number of other great plans going for it. The attendants will not charge extra carry-on luggage fees for up to two checked bags. The flight gate attendants take the time to help customers in wheelchairs first. The company culture is especially warm and friendly. This encourages its employees to also provide the highest-quality service possible.
Certainly the name limits the range of destinations where pilots can fly. After all, this is Southwest Airlines. With all that said, this corporation is very stable so far. The stock is currently declining in value, because investors are somewhat uncertain about the future of the airline travel industry. They have little reason to doubt Southwest Airlines though, because it consistently keeps customers happy.
The only major concern involves the prices of oil. The turmoil in the Middle East is obviously a big problem that affects the transportation of gas and oil to the United States. The price changes have even caused Southwest to slightly raise its airfare prices.
Southwest (LUV) still offers some of the lowest prices for air travel, though. The company has too many strengths to keep it from failing. Investors should definitely keep their faith in this major travel company. The value airliner provides some of the best benefits that no other airline capitalizes on.