Southwest Airlines (LUV) Falls Despite New Nonstop Flights Announcement

NEW YORK (TheStreet) -- Southwest Airlines  (LUV) was falling 1.96% to $20.54 on Monday morning despite the airline's announcement that it plans to add nonstop flights from Dallas to New York and 14 other cities.

The company announced it will begin the flights to five cities on Oct. 13, when federal limits on Dallas Love Field end, and then to 10 more cities on Nov. 2. The restrictions are part of a 1980 federal law known as the Wright Amendment, which was designed to protect nearby Dallas-Fort Worth International Airport by banning planes larger than 56 seats from flying anywhere except a few other cities in Texas and nearby states from Love Field. This meant that the routes to New York, Atlanta and other such cities from Love Field were off-limits to Southwest's Boeing 737 jets.

Southwest's maneuver could allow it to compete directly with other, larger airlines such as Delta Air Lines  (DAL) and American Airlines Group (AAL). Southwest will also compete against a similar service from American Airlines Group at Dallas-Fort Worth.

TheStreet Ratings team rates SOUTHWEST AIRLINES as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate SOUTHWEST AIRLINES (LUV) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."

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