Stock of the Day – Southwest Airlines

Southwest Airlines (NYSE:LUV) has dominated the news following reports that a three foot hole ruptured the fuselage mid-air during Flight 812. Bloomberg reports that Southwest has cancelled a further 100 flights today on top of large scale cancellations over the weekend, as inspectors have found small, subsurface cracks in two additional Boeing jets. In what is being described as metal fatigue in an aging fleet the media spotlight has returned to ask whether the airlines are doing enough to ensure people’s safety. Short interest has been rising since early February and stands at 2.77% of total shares outstanding on loan. Long only investors who lend reduced their holdings over the last six months, but bought heavily in March raising their stake to 220 million shares.