Hudson Securities Reports 1Q In Line On Southwest Airlines

According to Hudson Securities, Southwest Airlines

1Q is in line. Hudson Securities said that 2010 fare increases were quite effective - 1Q less so. “That is, demand elasticity is causing the latest price increases to become less effective (not to be confused at this point with dilutive). The mid-point of LUV's fare hikes for FY2010 totaled $17 and yields + fares were up 11% and $16 respectively. In contrast, LUV's avg yield & fare in 1Q were up just 5% YoY and $14 respectively (despite roughly $33 in fare increases over the past 12 months); see Fig 1. Pent up demand heading into a recovery, the general rate economic improvement, & the number of successive pricing actions are all factors that impact demand elasticity…and why revenue mgmt experts tell us they generally need 2 months to know if a pricing action is successful.” Southwest Airlines closed yesterday at $11.31.