Southwest Airlines draws questions about raising return targets after posting strong 3Q2014 results

Robust US domestic demand helped to drive a strong 3Q2014 financial performance at Southwest Airlines as nearly 99% of the airline's total capacity is deployed in the domestic market. Southwest delivered solid results across the board, in both top-line revenue growth and cost performance and in other important metrics including passenger unit revenue growth and unit cost.

The airline recorded a pre-tax 19% return on invested capital (ROIC) for the 12 months ending 30-Sep-2014, which is leading to questions about the possibility of raising its targets in that metric as Southwest seems poised to reach its stated goal of 15% pre-tax ROIC for CY2014.

Southwest's limited international exposure could continue to benefit the airline in the short term as large US network airlines American, Delta and United are refining their capacity in certain global regions in an attempt to restore a favourable supply-demand balance.