Southwest Airlines plans to return up to $5 billion to Shareholders

Southwest Airlines announced on Friday that it has planned to give back about $5 billion to its shareholders through a share buyback option. The airline company also said that as per the plan, the $5 billion will be returned by the end of fiscal year 2017. The company also revealed that it could buy about 1.5 billion of stock and has boosted the dividend for the quarter to more than seven cents per share.

According to reports, new flights of world's largest low-cost carrier will further increase the number of international arrivals to Daniel Oduber International Airport, which had about 378,485 visitors in 2014, an increase of about 14.6% from 2013. On Saturday, in a report, JPMorgan Chase & Co. restated natural rating on the shares of Dallas headquartered Southwest Airlines.

Gary C. Kelly, chief executive officer and chairman of Southwest Airlines, said that the company has returned all of free cash flow to the company’s shareholders last through $1.1 billion in share repurchases and dividend payments. The board increased quarterly dividend payment by about 25% and allowed a fresh new $1.5 billion share repurchase program, Kelly said. The program symbolized the largest in the company’s long-standing history of share repurchase programs, according to Kelly.

Kelly said, “Our balance sheet and liquidity remain strong with cash and short-term investments of approximately $3.2 billion1, and a fully available unsecured revolving credit line of $1 billion. We remain the only investment grade U.S. airline by all three credit agencies.” He further said that the company’s debt levels are modest.

In addition, Southwest has also announced that it is going to give new international service from Houston Hobby to about eight cities by the end of 2015.