Southwest: prospering in any environment

摘要

In periods of turmoil in the US airline indus-try, equity investors have always had one safe option (other than pulling their money out of the sector): Southwest Airlines. The Dallas-based low-fare pioneer, now the largest US carrier in terms of domestic passengers uplifted, has proved that it can prosper in any kind of environment, thanks to its unique business formula. Southwest has remained profitable through the post-September 2001 industry slump, albeit at reduced margins. Like other LCCs, it has made significant market share gains in the past three years. However, its financial performance has been particularly impressive in the past 12 months or so - a period that has seen crude oil prices surge from the mid-30s to the mid-50s (dollars per barrel).