Southwest is an American airline that looks in a good position for the current climate.

Southwest Airlines is a major American airline based in the USA. It is the world's largest low-cost carrier with a large fleet of over 750 aircraft. The company currently fly to over 100 destinations and employ over 60,000 people. Southwest has been hit hard by the Coronavirus, this year the share price fell 65% but has since started to recover from the lows.

The financials of Southwest are very good for an airline. Current market capitalisation is $18.9bn with 2019 revenue at $22.4bn. Profit after tax was $2.3bn down $165m from the previous year. The balance sheet was okay with $4.06bn cash on hand and receivables at $1.08bn. Total assets amounted to $25.89bn down $652m from the previous year. Total liabilities were $16.06bn, but this also fell around $330m. Overall last year the company was stable and profitable with very good net assets for an airline.

In Q1 of 2020 revenue was $4.23bn down $915m from the same time period last year and down $1.497bn from the last quarter. Because of the decline in revenue the company took a loss of $94m in Q1. This will most likely be the case with Q2 of 2020 too. Luckily the company is in a good financial position with the balance sheet. Cash on hand $5.54bn up $1bn from Q4 2019. Total assets have also grown to $26.85bn, however, liabilities have also gained $1.7bn. The company is stable at $9bn net positive assets,

From a technical standpoint point on the hourly chart, the shares have just turned into the positive Bollinger band and MACD looks close to crossing back positive. Until MACD does cross, the change in direction has been not be confirmed, if the MACD crosses and is supported by the Bollinger, the chart could change to upside momentum. The support trendline was broken on 10th June when the shares fell below $38. This support is now the first resistance, which now is around $40. A break above $40 could mean a rise to $42, then $47. RSI indicates fair value at 52, meaning the shares are not overbought, neither oversold.

Overall Southwest has good financials and a potential change to positive sentiment on the technicals. It has very good positive assets and a decent cash pile meaning it should be able to cushion the losses it will take, unlike some airlines. financially speaking Southwest is in a better cash position then Delta and American on the basis cash to revenue. Delta and American turnover twice as much as Southwest yet have smaller cash piles available. And when we look at American, they have negative assets and delta, while they do have positive assets, comparable to turnover, Southwest has a better ratio on the basis of revenue when compared. From a technical aspect the shares do give downside momentum but this is turning positive as this post is written, however, if the chart does turn positive $40 will prove tough resistance. To the downside $31 and the lows $23 should be supportive.