Southwest Airlines (LUV) Faces Risk From Negative PR
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Price: $44.26 -1.36%
Rating Summary:
18 Buy, 16 Hold, 3 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
18 Buy, 16 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Southwest Airlines Co. (NYSE: LUV) said last week it plans to accelerate integration of its AirTran Airways with a goal of fully folding the business into its own brand by the end of 2014. In the view of analyst at Imperial Capital, the integration is not without "hurdles", and a smooth transition remains in doubt.
"LUV's Chief Commercial Officer indicated that on a trip connecting across the two networks, whether or not you pay to check your bags would depend on which website you used to book the trip. Book your journey on southwest.com and your bags fly free, even on the AirTran flight. Book the same flights on airtran.com and your bags do not fly free, not even on the Southwest flight," said analyst Bob McAdoo.
The confusion carries over to early bird booking.
McAdoo said "we got the impression that either the company had not completely thought out the possibilities or that the solution was not going to be customer-friendly and that it was working on the best way to explain the policies."
Southwest also announced higher bag fees last week and, interesting, has already lowered them.
McAdoo said he feared LUV could face very negative press, as did United/Continental (NYSE: UAL) when it merged its reservation systems.
Imperial Capital has an In-Line rating on Southwest (NYSE: LUV) with a modified price target of $10.50 (from $9.00).
For an analyst ratings summary and ratings history on Southwest click here. For more ratings news on Southwest click here.
Shares of Southwest closed at $10.56 yesterday.
"LUV's Chief Commercial Officer indicated that on a trip connecting across the two networks, whether or not you pay to check your bags would depend on which website you used to book the trip. Book your journey on southwest.com and your bags fly free, even on the AirTran flight. Book the same flights on airtran.com and your bags do not fly free, not even on the Southwest flight," said analyst Bob McAdoo.
The confusion carries over to early bird booking.
McAdoo said "we got the impression that either the company had not completely thought out the possibilities or that the solution was not going to be customer-friendly and that it was working on the best way to explain the policies."
Southwest also announced higher bag fees last week and, interesting, has already lowered them.
McAdoo said he feared LUV could face very negative press, as did United/Continental (NYSE: UAL) when it merged its reservation systems.
Imperial Capital has an In-Line rating on Southwest (NYSE: LUV) with a modified price target of $10.50 (from $9.00).
For an analyst ratings summary and ratings history on Southwest click here. For more ratings news on Southwest click here.
Shares of Southwest closed at $10.56 yesterday.
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