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Southwest Air Requiring All 56,000 Staff to Be Vaccinated

Southwest Air said it’s adopting federal rules, which mandate that federal contractors be vaccinated.
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Southwest Airlines  (LUV) - Get Southwest Airlines Co. Report instituted a requirement that all its 56,000 employees be vaccinated against Covid-19 by Dec. 8 or they'll lose their jobs.

The Dallas carrier said it’s adopting federal rules, which mandate that federal contractors be vaccinated. Southwest Air and other major airlines qualify as federal contractors because they fly government workers and cargo.

The airline “completed a thorough review of President Biden's Covid Action Plan and determined that the carrier's contracts with the U.S. government require full compliance with the federal vaccination directive,” it said.

“Employees of Southwest Airlines must be fully vaccinated against Covid-19, or be approved for a religious, medical, or disability accommodation, by Dec. 8, 2021, to continue employment with the airline.”

The carrier joins United Airlines  (UAL) - Get United Airlines Holdings, Inc. Report, American Airlines  (AAL) - Get American Airlines Group, Inc. Report, JetBlue  (JBLU) - Get JetBlue Airways Corporation Report and Alaska Airlines  (ALK) - Get Alaska Air Group, Inc. Report in requiring staff vaccinations to comply with federal rules. Delta Air Lines  (DAL) - Get Delta Air Lines, Inc. Report imposed a $200 additional health-insurance premium on non-vaxxers.

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Southwest shares on Tuesday closed at $54.47, down 1%. It has jumped 13% in the past month, as the COVID-19 delta variant eases.

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Morningstar analyst Burkett Huey puts fair value at $65 for Southwest Air stock.

The shares "look somewhat attractive to us at current prices,” he wrote after Southwest’s most recent earnings report July 23.

“We think that Southwest is the best-positioned U.S. airline, as it is primarily exposed to the domestic leisure travel market. 

"We believe domestic leisure travel is the most likely form of air travel to be entirely unaffected by the pandemic over the long run.”