Buy Southwest Airlines on the ‘Unwritten Rules’ of Pandemic Travel

Outside of cruise ship operators, one of the industries that suffered the steepest declines was the airliners. That said, the devastation extended to discount specialist Southwest Airlines (NYSE:LUV). Sure, the company’s prices are tempting, and the company is known for quirky, catchy advertisements. However, flying in a packed airplane with hundreds of strangers during a pandemic isn’t exactly a great selling point. And not surprisingly, LUV stock tanked at the onset of the crisis.

Southwest Airlines (LUV) logo on aircraft that is taking off from McCarran in Las Vegas, NV.
Source: Eliyahu Yosef Parypa /

Starting from around mid-May, though, the industry started clawing its way back out of the hole. Primarily, novel coronavirus cases began to recede, leading to states gradually reopening their economies.

Additionally, traveler sentiment improved dramatically from its March and April lows. And, coupled with positive national economic readings, LUV stock seemed a credible buying opportunity.

Of course, you know what happened next. A resurgence of cases had several states pausing or rolling back their reopening. And with that, the harsh reality of this virus also took a toll on LUV stock.

Now, news broke that Southwest will no longer disinfect “armrests between flights, as it begins returning to a more normal turnaround schedule.” Instead, the company “altered its between-flight sanitization policy to focus on bathrooms and tray tables, forgoing seat belts and armrests, which will now be cleaned at night as part of its ‘six to seven hour’ deep clean.”

As a business policy, the move makes sense. The updated policy will save the airliner time, and time has always been money. But with the mitigation protocols that the industry had to impose, along with an overall reduction in flights, anything to gain an edge is on the table.

I understand trying to find an upper hand on the competition. In fact, for nearly my entire two-decade career in finance, I’ve been obsessed with one thing: getting there first when it comes to the “next big thing.”

If you know anything about the stock market, you know the power of being first. And right now, I’m looking to get in early on this next big megatrend.

Overall, though, the change to Southwest’s disinfecting protocol may not look like a great move to some. But will this hurt Southwest’s brand? Probably not, and here’s why.

A Code of Honor to Help Lift LUV Stock

First, let’s clarify one thing off the bat: Just because Southwest is modifying its cleaning measures doesn’t mean that it’s taking safety any less seriously. That’s according to Business Insider’s Thomas Pallini, who flew during the pandemic. He was “impressed” with the airliner’s social distancing management, despite it being a low-cost carrier.

Moving forward, frequent fliers will likely express similar sentiments. And while the mainstream media loves to promote the doom and gloom — honestly, that’s what attracts the most eyeballs — they don’t focus on the positives. A great example is how Americans as a whole have adapted to the new normal (i.e. wearing a face mask).

Are there crazy people that openly disregard such protocols, citing Constitutional rights or some other nonsense? Absolutely! But crazy people have always been with us. It’s grossly unfair to characterize the American public, most of whom are good, salt-of-the-earth types, with such kinds of shenanigans.

After all, most Americans are abiding by the new guidelines. This is not a familiar concept to us, yet we adapted in a matter of weeks, if not days. And this will be particularly helpful to LUV stock over the long run.

Moreover, as you know, baseball is back. And one of the interesting aspects about our national pastime is that this is a gentlemen’s sport. As such, it has myriad rules, not all of which are written. However, you best obey them. Otherwise, you’re going to get a projectile hurled at your face.

Again, most Americans understand the importance of adopting certain practices for the betterment of our nation. That means, right now, there’s an unwritten rule – everybody practices proper hygiene or risk retaliation.

Remarkably, we’re all on the same wavelength, which should be comforting to Southwest’s passengers — and ultimately, to stakeholders of LUV stock.

Life Goes On for Travelers and LUV Stock

Recently, I’ve written about cruise ship operators like Carnival (NYSE:CCL). And while I believe that at some point, these companies will make a great bargain play, that time is not now. However, you can’t make the same argument about LUV stock.

Simply, life has to go on — with the coronavirus or (hopefully) without it. Obviously, air travel connects us in typically the quickest, most convenient manner. And while our lives have been disrupted, once-in-a-lifetime moments  — we’re talking graduations, weddings, births of children — won’t or can’t wait.

The examples don’t have to be that dramatic. Whether it’s for a personal or business-related opportunity, people must get on with their lives. Even better, air travel demand shows robust growth relative to this year’s lows, despite the resurgence in cases. In turn, that’s a good sign as any to trust LUV stock.

Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. Click here to see what Matt has up his sleeve now. As of this writing, Matt did not hold a position in any of the aforementioned securities.

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