CONGRATS WN!
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coolflyingfool
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AND winglets for almost half of the -300 fleet, HOLY COW!!!
operaations
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From Us here at DFW Congrats. We made a profit also it sure feels good. It has been a long long time and struggle
i wish you all the best and lead the way
i wish you all the best and lead the way
BoeingBoy
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Not the best place for this but I didn't want to start a new thread.....Jim
From Aviation Daily:
Southwest Looking For Used Planes To Satisfy Demand
By Lori Ranson
07/20/2006 04:07:27 AM
After more than doubling its quarterly net income to $333 million, Southwest is tapping the used aircraft market for Boeing 737-700s to fulfill what CEO Gary Kelly described as "tremendous opportunities in the near term to grow revenue."
The carrier is taking 17 more -700s in 2006 and has 35 deliveries planned next year. It projects no aircraft retirements in the next two years, CFO Laura Wright said yesterday during an earnings call, adding that retirements probably wouldn't start before 2009. She also pointed out that demand for Boeing narrowbodies in Asia and Europe is strong, making it difficult to secure delivery positions before 2010.
Based on demand, Southwest could use another 20 planes on top of the 52 aircraft coming onboard through 2007, CEO Gary Kelly said. The airline won't seek that many planes, Kelly said, adding that the number is "just an order of margin." He ticked off several markets where the airline needs more aircraft, including Denver, Las Vegas, Raleigh, Reno, Chicago and New Orleans.
As it hunts for used -700s, Southwest posted a 26% rise in quarterly revenues to $2.45 billion from $1.94 billion. Net income rose from $144 million to $333 million. The carrier cited several reasons for its strong second-quarter performance, including a 5% drop in competitive capacity and a schedule optimization initiative that trim inefficient flights and allocate those planes to higher-revenue markets. Kelly said similar enhancements are planned in the short term.
Despite strong fuel hedges that spurred a cash benefit of $225 million, Southwest's unit costs, excluding fuel, rose 4.9% to 6.68 cents. The airline actually paid less per gallon during the second quarter -- $1.42 cents versus $1.46 in the first quarter.
Salaries, wages and benefits per available seat mile grew about 6.9%, Wright said. The airline incurred premium pay expense as a result of not being optimally staffed at some of its locations.
Although Southwest has instituted some fare increases, Kelly played down the latest spike on July 4, noting it affected only about 20% of the airline's passengers. He emphasized Southwest wanted to generate revenue gains aside from raising fares. Year over year, the airline's average fare for the second quarter jumped from $92.94 to $107.38. While Southwest's average fare broke the $100 mark during the second quarter, JetBlue's average fare during the first quarter was $107, essentially unchanged for the past two years (DAILY, April 26), and that carrier's executives are focusing on better revenue management to get an improved mix of fares.
Net margins for Southwest in the second quarter were 11.2%, and it posted operating margins of 17.5%. Its cash balances stood at about $3 billion, with projected capital spending of $1.3 billion in 2006.
Aviation Daily is available as a stand-alone product or as part of the Aviation Week Intelligence Network. For a FREE TRIAL to the newsletter, click here. If you already subscribe, login here.
From Aviation Daily:
Southwest Looking For Used Planes To Satisfy Demand
By Lori Ranson
07/20/2006 04:07:27 AM
After more than doubling its quarterly net income to $333 million, Southwest is tapping the used aircraft market for Boeing 737-700s to fulfill what CEO Gary Kelly described as "tremendous opportunities in the near term to grow revenue."
The carrier is taking 17 more -700s in 2006 and has 35 deliveries planned next year. It projects no aircraft retirements in the next two years, CFO Laura Wright said yesterday during an earnings call, adding that retirements probably wouldn't start before 2009. She also pointed out that demand for Boeing narrowbodies in Asia and Europe is strong, making it difficult to secure delivery positions before 2010.
Based on demand, Southwest could use another 20 planes on top of the 52 aircraft coming onboard through 2007, CEO Gary Kelly said. The airline won't seek that many planes, Kelly said, adding that the number is "just an order of margin." He ticked off several markets where the airline needs more aircraft, including Denver, Las Vegas, Raleigh, Reno, Chicago and New Orleans.
As it hunts for used -700s, Southwest posted a 26% rise in quarterly revenues to $2.45 billion from $1.94 billion. Net income rose from $144 million to $333 million. The carrier cited several reasons for its strong second-quarter performance, including a 5% drop in competitive capacity and a schedule optimization initiative that trim inefficient flights and allocate those planes to higher-revenue markets. Kelly said similar enhancements are planned in the short term.
Despite strong fuel hedges that spurred a cash benefit of $225 million, Southwest's unit costs, excluding fuel, rose 4.9% to 6.68 cents. The airline actually paid less per gallon during the second quarter -- $1.42 cents versus $1.46 in the first quarter.
Salaries, wages and benefits per available seat mile grew about 6.9%, Wright said. The airline incurred premium pay expense as a result of not being optimally staffed at some of its locations.
Although Southwest has instituted some fare increases, Kelly played down the latest spike on July 4, noting it affected only about 20% of the airline's passengers. He emphasized Southwest wanted to generate revenue gains aside from raising fares. Year over year, the airline's average fare for the second quarter jumped from $92.94 to $107.38. While Southwest's average fare broke the $100 mark during the second quarter, JetBlue's average fare during the first quarter was $107, essentially unchanged for the past two years (DAILY, April 26), and that carrier's executives are focusing on better revenue management to get an improved mix of fares.
Net margins for Southwest in the second quarter were 11.2%, and it posted operating margins of 17.5%. Its cash balances stood at about $3 billion, with projected capital spending of $1.3 billion in 2006.
Aviation Daily is available as a stand-alone product or as part of the Aviation Week Intelligence Network. For a FREE TRIAL to the newsletter, click here. If you already subscribe, login here.
Thanks for the update Jim
So employee costs are up, absolutely and per ASM, just a while back someone said they were actually going down - no way possible with the contracts.
Very good quarterly results by SWA.
JBG
WN's oldest -300s (N300/301/302SW are the three oldest) were delivered at the end of 1984, so they will just be hitting the 25-year mark at the end of '09.
BoeingBoy
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That may have been me back after the 1st quarter results were announced. Haven't tried to find the post, but I vaguely remember something about that.
1st qtr employee costs per ASM were down year over year slightly - 0.02 cents per ASM or 0.6% - but if I implied that it was a trend that would continue it was unintentional.
Jim
Jim,
I do not recall it as you, but now up nearly 7 percent shows the impact of the contracts. That being said, they are having no problem raising revenue to meet that increased cost.
JBG
Looking at used planes to grow even faster?
I know that WN has a very long streak of uninterrupted profits and generally knows what it's doing, but they ain't dancin' with the one that brung 'em anymore if they're looking to grow even faster than their aggressive new airlplane delivery schedule will permit. WN built its profitable empire on steady, measured growth and lately has seemingly thrown that caution to the wind. It will probably work out alright for them, but if it doesn't, I'll be bumping this post.
I know that WN has a very long streak of uninterrupted profits and generally knows what it's doing, but they ain't dancin' with the one that brung 'em anymore if they're looking to grow even faster than their aggressive new airlplane delivery schedule will permit. WN built its profitable empire on steady, measured growth and lately has seemingly thrown that caution to the wind. It will probably work out alright for them, but if it doesn't, I'll be bumping this post.
They are being aggressive, but looking for used jets during a shooting war in the middle east and hedging while oil is at 75...me thinks they may be reading too many of their own press clippings.
JBG
Not to confuse you with facts, Guppy <_< .......
....employee costs are up due to higher profit sharing expenses, which are based on earnings, which are also up. You don't have to believe me, it's right there in the press release.
If you'll look over SWA's history, it's always expanded more in tough times. The current issue of Luv Lines has a graphic showing deliveries and '93 stuck out for me. SWA added 37 planes that year, right at the end of the first Iraq war. Growing a fleet from 141 to 178, in '93 is a larger percentage gain than 478 to 513 by the end of '07. :blink:
But that's just my .02.
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