The Bull Case For Southwest Airlines (LUV) Could Change Following Launch of In-House Vacation Packages

• Earlier this month, Southwest Airlines announced the launch of Getaways by Southwest, its new in-house vacation packages product offering bundled air, hotel, car, and ground transportation options, along with new route expansions at Knoxville, Tennessee, and additional service from San Diego starting in 2026.
• This move marks a significant push into the vacation packaging market for Southwest, leveraging enhanced flexibility, loyalty rewards, and expanded travel itineraries to attract a broader group of leisure travelers.
• We'll examine how Southwest's new in-house vacation packaging product could reshape its investment outlook and customer growth potential.

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Southwest Airlines Investment Narrative Recap

To be a shareholder in Southwest Airlines, you need to believe in the company’s ability to grow passenger demand through new services and products while managing industry-wide competition and cost pressures. The launch of Getaways by Southwest could have a positive short-term impact by strengthening ancillary revenue streams and attracting leisure travelers, though risks from macroeconomic uncertainty and volatile booking trends remain significant. Short-term catalysts such as premium seating rollouts may amplify growth, but uncertainty in demand forecasts continues to loom.

Read the full narrative on Southwest Airlines (it's free!)

Southwest Airlines is projected to reach $32.6 billion in revenue and $1.9 billion in earnings by 2028. This outlook assumes a 5.9% annual revenue growth rate and a $1.5 billion increase in earnings from the current $392 million.

Uncover how Southwest Airlines' forecasts yield a $31.86 fair value, a 3% downside to its current price.

Exploring Other Perspectives

Eight Simply Wall St Community members estimate Southwest’s fair value from as low as US$7.74 to as high as US$46, reflecting widely differing forecasts. With softened booking trends posing a risk to near-term results, take a closer look at how...

Explore 8 other fair value estimates on Southwest Airlines - why the stock might be worth as much as 40% more than the current price!

Build Your Own Southwest Airlines Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Southwest Airlines research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Southwest Airlines research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Southwest Airlines' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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