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How Does Southwest Airlines Compare To Their Peers?

Southwest is part of the big four airline operators alongside legacy carriers such as American Airlines, Delta Air Lines, and United Airlines, and the rest of the market is fractioned among smaller players such as Spirit Airlines, Frontier, Alaska Air Group, Inc. (ALK), JetBlue Airways, and SkyWest, Inc. (SKYW). 

The legacy peers of Southwest have exhibited similar revenue rebound trends to that of Southwest in the last few quarters. The revenue of American Airlines grew 122% year-over-year to $8.9 billion in Q1 which is around 84% of 2019 levels. United Airlines reported stellar revenue growth of 134.9% YoY to $7.6 billion which is around 79% of pre-pandemic levels. Delta also reported a 159% YoY growth in revenue to $9.35 in Q1, which comes to around 89% of pre-pandemic levels. Southwest revenue, as highlighted earlier, recovered to 91% pre-pandemic levels in the first quarter, so it would be fair to conclude the company is performing in line or slightly better than its legacy peers from a revenue growth perspective.

If we look at the stock market performance of the legacy airlines group this year, Southwest is the only company to deliver positive total returns. We believe this comes down to the company's strong presence in domestic markets, comparatively better management of fuel costs, and strong liquidity position.