Southwest Airlines shares rebound on Thursday, additional training needed after 737 MAX software update, Southwest pilot union says

According to a memo by Southwest Airlines Pilots’ Association (SWAPA) earlier this week, pilots will require additional computer-based training following the planned software update on Boeings 737 MAX jets.

Shares of Southwest Airlines closed higher for the fourth time in the past fifteen trading sessions in New York on Thursday. It has also been the sharpest daily surge since February 28th. The stock went up 2.09% ($1.04) to $50.74, after touching an intraday high at $51.03, or a price level not seen since March 19th ($51.72).

Shares of Southwest Airlines Company have risen 9.17% so far in 2019 compared with a 13.88% gain for the benchmark index, S&P 500 (SPX).

In 2018, Southwest Airlines Co’s stock went down 28.98%, thus, it again underperformed the S&P 500, which registered a 6.24% loss.

Boeing Co has been developing a software update to its MCAS anti-stall system since the October 2018 incident with Lion Airs 737 MAX 8 jet, which crashed in the Java Sea, killing all 189 people on board.

The association said that the proposed Boeing training had already been previewed, including a final test, which Southwest pilots would need to pass before operating Boeings 737 MAX aircraft again.

The first 737 MAX simulator is expected to be provided to the air carrier in July, SWAPA said, while it should be ready for use in October. Additionally, Southwest Airlines is to receive two more simulators in October and three more in January 2021.

“It is still very disturbing to us that Boeing did not disclose MCAS to the operators and pilots,” SWAPA said in a memo to its members, cited by Reuters. “This methodology should, and can, be examined….Questions about increased digitization of an existing aircraft should be examined.”

According to CNN Money, the 19 analysts, offering 12-month forecasts regarding Southwest Airlines stock price, have a median target of $64.00, with a high estimate of $75.00 and a low estimate of $49.00. The median estimate represents a 26.13% upside compared to the closing price of $50.74 on March 21st.

The same media also reported that 10 out of 23 surveyed investment analysts had rated Southwest Airlines stock as “Hold”, while 9 – as “Buy”. On the other hand, 2 analysts had recommended selling the stock.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for Southwest Airlines Company (LUV) are presented as follows:

Central Pivot Point – $50.58
R1 – $52.57
R2 – $53.78
R3 – $55.77
R4 – $57.77

S1 – $49.37
S2 – $47.38
S3 – $46.17
S4 – $44.97

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