In the wake of the Covid-19 pandemic, airlines like Southwest Airlines (NYSE:LUV) have struggled, but shown signs of recovery in 2021. Similarly, investors in LUV stock have been subjected to ups and downs, with little clarity as to where the share price might be headed.

The result has been mixed feelings among stockholders and commentators. For instance, InvestorPlace contributor Dana Blankenhorn called Southwest “the best airline name you can buy,” but also warned prospective investors about the stock’s volatility.

That’s a fair assessment, and a reasonable concern. And with the holiday season upon us, we might wonder whether Southwest can get travelers to their destinations without hiccups.

Sure, there’s an incoming CEO who’s quite confident about Southwest’s recent bookings numbers. That’s all fine and good, but there are issues which both travelers and shareholders should be aware of now.

A Closer Look at LUV Stock

If LUV stock had been flown by a pilot in 2021, I would fire him immediately — if he managed to land the plane, that is.

Southwest stock has shown no sense of direction whatsoever. Prices soared from $45 to nearly $65 early in the year, only for the company to give up those gains by late October.

Prior to the Covid-19 pandemic, LUV stock was trading slightly below $60.

So $60 could prove to be a battle line between the buyers and the sellers. The 52-week high of around $65 is likely to also be a zone of contention.

To be honest, LUV stock’s random price action makes it resistant to technical analysis.

Suffice it to say that momentum-oriented traders might choose to buy above $60, while value investors could start accumulating shares at $45.

A Tale of Two CEOs

Not long ago, Southwest Airlines issued its third-quarter 2021 financial results. The numbers were less awful than anticipated, but nothing to write home about:

• $4.7 billion in revenues, versus the analysts’ consensus estimate of $4.64 billion (compiled by Bloomberg)
• Adjusted pre-tax income loss of $135 million, which was better than the expected $141 million loss
• Adjusted earnings loss of 23 cents per share, a relative “beat” compared to Wall Street’s estimate of a 26-cents-per-share loss

Note that the $4.7 billion in quarterly revenues, which might sound impressive, was still 17% below the same-quarter revenues from 2019.

Furthermore, current Southwest Airlines CEO Gary Kelly wasn’t exactly overflowing with positive guidance.

“I am very hopeful we are on the right trajectory here but it may be 2022 before we see sustained profitability,” Kelly warned.

In contrast, incoming Southwest Airlines CEO Robert Jordan seems to be quite confident as the company heads into the holiday season.

“Our bookings for the holidays are basically following the curve that they followed in 2019, which gives us a lot of assurance that there’s demand there,” Jordan recently said in an interview.

Bookings Aren’t the Problem

“And we’re seeing our holiday trends right in line with 2019, which is, I think, very encouraging… You know, people are booking all over,” the incoming CEO added.

Clearly Jordan wants to focus people’s attention on Southwest’s apparent recovery in its bookings numbers.

Amid a shortage of workers though, getting Southwest’s bookings back to pre-pandemic levels isn’t the main issue.

Here’s an example of what I’m talking about: last month, Southwest Airlines canceled more than 2,000 flights during a three-day, Friday-through-Sunday span.

Shockingly, the airline canceled three of every 10 departures it had scheduled on that Sunday, blaming the cancellations on air traffic control problems, poor weather conditions and limited staffing in Florida.

The operational meltdown and resulting flight cancellations reportedly cost Southwest Airlines $75 million.

Between the rising demand cited by Jordan and persistent labor shortages, Southwest will be vulnerable to more travel disruption this holiday season.

Apparently, the airline aims to hire 5,000 employees by the end of 2021. But achieving this goal won’t be easy. “The competition for the talent and for really good talent is even tighter,” acknowledged Greg Muccio, director of talent acquisition at Southwest.

The Bottom Line

On a technical level, LUV stock is difficult to analyze.

Meanwhile, Southwest Airlines faces the challenge of a staffing deficit while the carrier’s bookings are strong.

All of this makes it hard to recommend an investment in Southwest, at least for now.

There’s nothing wrong with watching and waiting, and hoping that the planes get the customers and crew to their destinations safely and on time.

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On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.