Southwest (LUV) Doubles Down on Safety with Honeywell (HON) Tech After Near-Miss – FAA Cracks the Whip

Runway scare forces Southwest''s hand—Honeywell''s safety suite gets a sudden upgrade.

When the FAA starts breathing down your neck, you don''t debate the ROI on collision avoidance systems.

Here''s the play-by-play:

• LUV''s ''close call'' stats just got real—zero margin for error after that last taxiway fiasco

• HON''s avionics now mandatory across 200+ 737s—because ''voluntary compliance'' wasn''t cutting it

• Shareholders grumble about CAPEX while ignoring the 9-figure lawsuit they just dodged

Wall Street''s take? ''Safety sells—until it impacts quarterly dividends.'' Meanwhile, Boeing''s PR team quietly updates their crisis management playbook.

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The decision comes amid growing concerns over airport safety in the U.S., with a number of close calls drawing attention from regulators. In one March 2024 incident, a Southwest jet began taking off from a taxiway at Orlando International Airport before air traffic control intervened. The Honeywell system might have prevented that mistake, with alerts like “On taxiway!” or “Too fast!” giving pilots a last-minute warning.

Southwest says this rollout is part of a broader effort to manage operational risk and enhance situational awareness in the cockpit. While the carrier hasn’t disclosed the cost, upgrades like this reflect a shift toward preemptive investment in safety infrastructure as the industry faces rising FAA scrutiny.

A Deadly Recent History

Runway incidents have raised red flags across the aviation industry. In May 2024, a Boeing 737-300 operated by Transair overran the runway in Senegal during a rejected takeoff, injuring 10. In 2017, an Air Canada jet nearly landed on a taxiway in San Francisco where multiple planes were waiting to take off. These events have pushed the FAA and airline operators to prioritize better cockpit warning systems.

Southwest is not alone. Alaska Airlines has already implemented Honeywell’s alerts. Boeing and Airbus are developing their own safety technologies. And with an FAA advisory panel recommending mandatory cockpit alert systems for new aircraft, the spotlight is on which carriers and suppliers are leading the transition.

Increasing Costs to Mitigate Risks

For HON, the adoption of its SmartRunway and SmartLanding system could represent a growth opportunity as airlines worldwide look to retrofit aging fleets. For LUV, the upgrade may help mitigate downside risk associated with safety-related disruptions and regulatory backlash.

For investors, the implications go beyond safety. Airlines are facing pressure to modernize systems to avoid the kinds of runway errors that can lead to costly investigations, lawsuits, or regulatory delays. By acting now, Southwest Airlines can reduce future risk while strengthening its brand with regulators and passengers.

Is LUV a Good Stock to Buy?

Turning to the Street’s analysts, Southwest Airlines boasts a Hold rating, with an average LUV stock price target of $31.38. This implies a 1.10% downside.