Southwest Airlines (NYSE 🙂 was forced to cancel nearly 2000 flights due to insufficient staffing, air traffic control problems, severe weather and poor personnel. The company also faces operational challenges. So, with growing challenges in the aviation industry, and given LUV’s negative profit margins, is it worth betting on the stock at its current price level? Let’s find out.Southwest Airlines Co. (LUV), the world’s largest low-cost carrier, operates in the United States and nearby international markets, providing scheduled air transportation services. Based in Dallas, Texas, the company had 718 Boeing (NYSE 🙂 737 planes and served 107 locations across 40 US states by December 31, 2020.

LUV’s shares have declined 23.5% in price over the past six months and 11% over the past month to close yesterday’s trading session at $47.24. The company’s 52-week peak of $64.75, reached on April 14th 2021, is 27% lower than its current trading price. The aviation sector is slowly recovering from the pandemic. However, there are growing concerns regarding the impact of air travel on climate change and the rising price of oil that could impede its growth.

In addition, LUV’s operational inefficiencies and poor profitability could cause its share price to retreat further in the near term.

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