Goldman Sachs’ Top Growth Investors: 34 Stocks With The Highest Investment For Growth

32. Southwest Airlines Co. (NYSE:LUV)

Growth Investment Ratio: 71%

Number of Hedge Fund Holders: 38

Southwest Airlines Co. (NYSE:LUV) is a sizable American airline with 817 aircraft in its fleet. Like other players in the airline industry, the firm has also faced ‘turbulence’ in 2024 stemming from Boeing’s production woes and delays. Southwest Airlines Co. (NYSE:LUV)’s stock is up 13.7% year-to-date as it continues to recover from a 16% drop in March when Boeing’s delays meant that the airline would receive fewer planes and head into a busy season with tight inventory. To stem the headwinds from these problems, Southwest Airlines Co. (NYSE:LUV) has undertaken a strategy to increase redeye flights, increase revenue from existing passengers, launch vacation packages, and increase partnerships with international airlines. Subsequently, the firm’s narrative is driven by the strategic aims that should drive Southwest Airlines Co. (NYSE:LUV)’s stock performance.

Southwest Airlines Co. (NYSE:LUV)’s management shared details about its strategies during the Q3 2024 earnings call. Here is what they said:

“Our strategic initiative work is also progressing as planned. On the seating and cabin front, we are working actively with both regulatory agencies and vendor partners towards successful approval and certification of our new premium cabin configurations. That would allow aircraft retro fits to begin early next year. We will start with our larger aircraft and the 700s will follow. We are planning to retrofit 50 to 100 aircraft per month, completing the work late next year. We are also announcing today that we have signed our first three direct lodging partners for our Getaways by Southwest product that is planned to launch mid next year and that includes Caesars Properties in Las Vegas. And finally, we are narrowing the launch date of our previously announced partnership with Icelandair for the first quarter of 2025.

Looking at cost and efficiency of initiatives, we continue to expect to end this year with headcount down 2,000 as compared to year end 2023. Improved turn times are reflected in existing schedules starting in November and red-eye service will begin next February. We’re also very proud of our industry-leading domestic operational reliability. We had the best completion factor and on time performance of any major airline this quarter and Andrew will share additional highlights shortly. Regarding progress on our fleet monetization strategy, we’re already starting actively exploring the market and are encouraged by what we are seeing.”