According to an announcement by the (NYSE:DAL) yesterday, they plan to return up to $5 billion to their shareholders through share buyback by the end of the fiscal year 2017 (FY17). The airline also declared that they will boost their quarterly dividend to 7.5 cents a share and repurchase another $1.5 billion of stock. It is presumed that the number of international arrivals to Daniel Oduber International Airport will increase due to Southwest’s new flights, which last year recorded 378,485 visitors, a 14.6 percent increase from 2013. Flights are safer and much more efficient due to with more concise weather knowledge.
On Saturday JPMorgan Chase & Co. was reported to restate their neutral rating on shares of Southwest Airlines.
Gary C. Kelly, Chairman of the Board, President, and CEO, declared that they are fully focused on returning value to their shareholders. They returned almost all of their free cash flow to shareholders in 2014 through $1.1 billion in share repurchases and dividend payments. With the intention of further demonstrating their strong financial position, performance, and cash flow outlook, the Board reinforced their commitment to create value for their shareholders today. They authorized a new $1.5 billion share repurchase program and increased their quarterly dividend payment by 25 percent, representing the largest single authorization in our long-standing history of share repurchase programs.
With cash and short-term investments of approximately $3.2 billion, their balance sheet and liquidity remain strong and a completely available revolving credit line of $1 billion. At this moment they seem to remain the only investment grade U.S. airline by all three credit agencies. In addition, Southwest airline continue to prudently manage their invested capital with an unthreatening debt level.
Moreover, they will offer new international service from Houston Hobby to eight cities by the end of this year.
Dallas-based Southwest will be offering flights to Cancun, Puerto Vallarta and Los Cabos, Mexico for $149, flights from Mexico City for $99, flights from Belize City, Belize, for $127 and flights from San Jose, Costa Rica, for $174.These flights and prices will be effective from October 15th. The airline will also offer flights to Liberia, Costa Rica, for $174 and flights to Montego Bay, Jamaica, for $199 which will be effective from 1st November. All the above mentioned international flight pricing so far have been announced for one-way economy tickets.
However, the Southwest Airlines Company also declared that the services to Jamaica, Costa Rica and Belize are subject to foreign government approval.
