All in the same cockpit... Major US airlines just dropped earnings, and we're sensing a trend: American, Delta, and United all reported $1B+ losses. But their outlooks were brighter on rebounding travel demand (thanks: vax rollout, spring break). While these airlines saw their 5th-straight quarterly losses, Southwest came in out of left airfield:
LUV being different... LUV is Southwest's ticker symbol — and its mood in 2021. The favorable wind boosting Southwest: its domestic and leisure focus. Business travel has been hammered by the WFH life, and some execs say it may never recover. International travel has been hammered as Covid lockdowns hit Europe, and many international borders remain closed.
Sometimes, less is more... Sure, Southwest doesn’t have the reach of bigger international airlines. Most of its eggs are in the US economy class basket, so it suffers when that basket suffers. But its risk exposure to other factors, like international travel, is limited. Now, other airlines are leaning more into domestic leisure travel, too: Delta, American, and United recently added dozens of domestic routes. Alaska added four new routes to tourist-friendly Montana destination (think: Yellowstone). We can expect these airlines to focus more on your Miami girls trip, less on your Dallas conference.