Why Wall Street Isn’t Happy With Southwest’s 43 Straight Years of Profits
Photo Credit: Southwest does not levy bag fees, which it believes is a competitive advantage. But some analysts do not agree. Southwest Airlines
Skift Take
Southwest has made money for more than 40 years. But that consistency does not satisfy many Wall Street analysts, who keep pushing the airline to increase profits.
For 43 consecutive years, Southwest Airlines has made money, making it by far the most consistently profitable U.S. carrier.
But while there's no indication Southwest's streak will end, some analysts are expressing frustration, saying the airline could earn more if stopped clinging to strategies that worked best decades ago.
Southwest has grown markedly since the 1970s, morphing from a small, quirky, Texas-centric airline into the nation's largest domestic carrier. Even in the past 10 years, change has come fast, with the airline focused mostly at the largest U.S. airports, such as New York LaGuardia, Philadelphia, and Los Angeles, rather than at the outlying airports like Manchester, New Hampshire that it once preferred. Southwest is even adding international routes, mostly to Mexico and the Caribbean.
Though its paint job and route structure have changed, Southwest remains at its heart Herb Kelleher's airline. Now 85, Kelleher was one of Southwest's founders, and he led t
