Southwest Airlines Co. (NYSE:LUV)

They can't all crash and burn...

Has oil locked in for the next year or so at 65$ a barrel. Will make profits during this time.

I decided to create a portfolio with only products or services that I use without regard to price/value in order to compare with my own personal port

hedging can't last forever. Higher oil prices will. They have been unscathed in the airline carnage. Expect that to end in the fall.

THIS COMPANY HAS EXELENT MANAGEMENT AND CAN WITHSTAND THE FUEL DILEMA

Southwest has long term fuel contracts that give it the edge over other airlines that are currently struggling

What people miss about the SWA story is not that they are the only airline able to consistently hedge fuel, because of their corporate structure and excellent balance sheet, but it is a story of unequalled corporate culture. The focus at Soutwest is on their people and it shows in their excellent service and safety record.

Put that against a backdrop where it is widely expected that any 'majors' entering bankruptcy (during this credit restricted time of ours) will be forced into Chapter 7 liquidation rather than returning, as usual, as artificially competitive zombie companies and you have a nice catalyst for growth. The recent changes to the boarding process, new Rapid Rewards restrictions, buisness select product (andI see increasingly large groups of folks using business select during my regular travels with SWA), WiFi, etc are compelling drivers for profit growth.

At 13 bucks per share I believe this stock has considerable upside to the 20 dollar range within the next 12 months.

This is an airline that has posted profits in every of their 37+ years of operation and never laid off a single worker. Don't discount SWA. LUV is the king of the US carriers and will remain so provided legislators let the free market work.

The strongest in a weak industry. LUV wisely locked in oil prices a few years ago and is paying only a fraction of the price that other airlines are forced to pay for crude oil.

Southwest is hedged against oil prices through 2009. They are paying something like $51 a barrel at this point. Luckily the other airlines are not and will be jacking up prices to cover the $130 a barrel cost. Should lead to Southwest pulling in some healthy profits in the next couple years.

I did a presentation on Southwest airlines for a class, and I found information that makes me believe they will underperform the S&P 500 within the next two to four years.

In the past, Southwest has posted profits while their competitors have been suffering. Their success comes from hedging oil prices. By the year 2010, our case study reveals that they won't be able to hedge 100%. Rising fuel prices have been a heavy burden on the competitors, and Southwest's hedging strategy provided them a large advantage that made them profitable. When the company is unable to use this strategy, their stock will decrease in value.

My second concern with Southwest is that they have new market entrants to worry about. New and growing companies are using the same low cost structure that Southwest implements. One of these new companies is JetBlue airways. They have newer planes, and more amenities for customers such as individual televisions for each passenger and more leg room. I think that new competitors will be a threat to southwest and this will contribute to the stock underperforming the S&P 500 in the next two to four years.

Summer is around the corner and people will ALWAYS need to fly with good, bad and mostly indifferent service.

when you can fly to vegas on $40 versus spending almost $80 or more to get there driving southwest will be the airline of choice. People will be traveling less but for now, this airline has a very good chance of becoming their airline of choice when they do travel. They have always had good prices and now, oil or not, unless they jack their price up a lot, they will still have flyers choosing them over other airlines with a $50 extra bag fee.

great management

inverse of oil prices

I find it hard to believe that all airlines exist to do is lose money. If any airline is going to make money, then that airline is Southwest.

Lets try this one on for size and let the returns come to papa!

Southwest airlines - what can I say about the budget carrier that most do not already know. Since inception they have been profitable - they survived the price wars of the 80s and they hedge their fuel. Plus this texas based airline shuttles people all over the United States in a fasion unlike any other - quick and easy. I have always called southwest the greyhound of the skies. With current budgets of middle America I see the ticket sales with this airline being high this summer since most families will be vacationing in the states and with the current price of gas it makes sense to fly. Also the instability of most other airlines will prompt the business travelers to go with the reliable carriers.

Solid Airline

airline