Profits

[LD3]

jbq says: Without your fuel hedge, your company is an also ran in service, an anomaly that profited on the difficulties brought by 9-11 that were visited on all of us except you.

it seems like alot of people refer to "fuel hedging" as one of the only reasons WN makes money..maybe maybe not. Guess what, their in the black, that is what only matters, they have a loyal happy workforce, does NW, LCC and others...no. Times are changing, pretty soon everyone will be turning a profit, so if WN's profit fall somewhat I dont think they will be ready to tank, it just means everyone is on the same playing field, only some of the other airlines got there thru BK....

 

[KCFlyer]

Sorry,
no one is predicting SWA will fail or die as a company. They will just not enjoy the superior economics compared to others that they have through their fuel hedge.

Now that you have a sycophant from AMR joining the fray I will leave to your illusions of grandeur.

Remember this, SWA is on the decline.

Out

I guess Southwest's fuel hedges were the equivalent of a 3 year stay in bankruptcy. Let's call it a level playing field...shall we?

You still haven't really addressed how United will fare against AMR - who managed to also show profits without resorting to bankruptcy. They didn't have fuel hedges...they showed a profit. They didn't stiff creditors...they showed a profit. They didn't screw shareholders...they showed a profit. They may not have the greatest managment/labor relations - but they didn't screw their employees nearly as bad as UAL (and others) did theirs. And....American serves London. How do you compete with that?

 

[magsau]

You still haven't really addressed how United will fare against AMR - who managed to also show profits without resorting to bankruptcy. They didn't have fuel hedges...they showed a profit. They didn't stiff creditors...they showed a profit. They didn't screw shareholders...they showed a profit. They may not have the greatest managment/labor relations - but they didn't screw their employees nearly as bad as UAL (and others) did theirs. And....American serves London. How do you compete with that?

Your revisionist history here is a bit off. Do you not remember the actions at AA after the UAL BK? The AA f/a's rejected the concessionary contract setting up AA for a BK filing. The company and union somehow revoted and convinced the f/a's to vote yes. AA was able to show its creditors and lease holders the roadmap at UA and used that as a tool to reorganize outside of the BK process. In all actuality AA proceeded as if it was in BK. Furloughing, reducing flying and airplanes. Gone since 9/11 are the MD11's, 767-200's, F100's and many MD80s. They have also announced or cut some 757's from the fleet and more md80s to be severed.

I am comfortable with out ability to compete and appreciate your concern.

 

[mga707]

You still haven't really addressed how United will fare against AMR - who managed to also show profits without resorting to bankruptcy. They didn't have fuel hedges...they showed a profit. They didn't stiff creditors...they showed a profit. They didn't screw shareholders...they showed a profit. They may not have the greatest managment/labor relations - but they didn't screw their employees nearly as bad as UAL (and others) did theirs. And....American serves London. How do you compete with that?

With "Skygod" pilots like the ones (well, three that come to mind) who lurk here?

Seriously, you ever read the book by that title ("skygods", that is) about the long decline and fall of PanAm? These UAL goofs would fit right in.
Heck, I've nothing against UAL. The few times I've flown them have been fine. I've even heard Capt. Al Haynes speak, twice. But Capt. Haynes could fit his hat on his head. These guys are so full of their own wonderfulness it's amazing they can get theri heads through the cockpit door...

Wrong. Southwest's capacity increased by roughly 9% in 2001 (largely due to expansion before 9/11) but growth then slowed to 5.5% in 2002 and 4.2% in 2003. By comparison, Southwest grew 13.3% in 2000 and 11.1% in 1999.

Excellent post, Kyle!
How dare you go and confuse him with the facts...

 

[NewHampshire Black Bears]

WOW, (As McDonalds says) "I'm LOVIN' it. (ALL this positive WN + AA talk)

Why someone might get the IDEA that AA/WN were....."actually" neighbors, and have know each other..."closely" for 30+ years


Only a "select few" are aware that AMR publishes WN's Inflight magazine.........But don't tell anybody....OK ?



NH/BB's


ps,

I'm betting that BEFORE Herb gave Kelly the "head honco" job, he told GK that "you WILL get along with Gerard Arpey,(but you CAN keep it a secret")

 

[LD3]

I guess Southwest's fuel hedges were the equivalent of a 3 year stay in bankruptcy. Let's call it a level playing field...shall we?

How many employees and creditors got screwed?

 

[skyguy25]

WOW, (As McDonalds says) "I'm LOVIN' it. (ALL this positive WN + AA talk)

Why someone might get the IDEA that AA/WN were....."actually" neighbors, and have know each other..."closely" for 30+ years
Only a "select few" are aware that AMR publishes WN's Inflight magazine.........But don't tell anybody....OK ?

NH/BB's
ps,

I'm betting that BEFORE Herb gave Kelly the "head honco" job, he told GK that "you WILL get along with Gerard Arpey,(but you CAN keep it a secret")

Anyone who had a brain cell could have looked at the title page to see who published the magazine. Tt was printed in each and everyone of the magazines- so not sure what the big secret was.
Actually Southwest Airlines fired AA publishing a few months back and the magazine is now being published by a firm in the Carolinas....was a big, huge hit to AA. SPIRIT magazine holds the highest domestic readership of any inflight magazine and is targeted to the highest demographics.

 

[KCFlyer]

I guess Southwest's fuel hedges were the equivalent of a 3 year stay in bankruptcy. Let's call it a level playing field...shall we?

How many employees and creditors got screwed?

None...but if jb wants to point to SWA's fuel hedges as the only reason for their profitablity, then he also needs to understand that were it not for a 3 year stay in bankruptcy, screwing employees and creditors, his airline would not be in business. Therefore - it can be argued that any "profit" that UAL has is a direct result of their bankruptcy trip - which should be considered the "leveling of the playing field", although IMHO, American has been the only airline to compete on a truly "level" playing field.

 

[ramper_in_las]

Only a "select few" are aware that AMR publishes WN's Inflight magazine.........But don't tell anybody....OK ?

Only a select few?... Anybody who has read Spirit, noticed on the table of contents it has the AA logo on it... But lets get your facts straight AA is not publishing the magazine anymore as of Sept. 06...

 

[LD3]

None...but if jb wants to point to SWA's fuel hedges as the only reason for their profitablity, then he also needs to understand that were it not for a 3 year stay in bankruptcy, screwing employees and creditors, his airline would not be in business. Therefore - it can be argued that any "profit" that UAL has is a direct result of their bankruptcy trip - which should be considered the "leveling of the playing field", although IMHO, American has been the only airline to compete on a truly "level" playing field.

BINGO!!!!!

 

[wnbubbleboy]

Reading this reminds me HOW much the TSA is killing us. Some Terrorist Farts too loud in an other country and bring on the restrictions. What's next exploding Bras? Ladies watch out!

Anyway sorry for getting off topic here's a story from the Houston Chronicle

So far this earnings season, it's been the old-line hub carriers churning out strong profit reports and topping analysts' expectations. Low-cost competitors, meanwhile, have fallen short of Wall Street forecasts or announced scaled-back growth plans.

It's a stark turnaround from a year ago, when the list of network carriers in, entering or exiting Chapter 11 bankruptcy protection included Delta Air Lines, Northwest Airlines, United Airlines' parent and US Airways. The old-line carriers were seeking to cut costs and restructure to better compete with the upstart low-cost carriers.

The reason for the spotlight shift back to legacy carriers, analysts say, is due partly to heightened airport security this summer and partly to the preferences of business fliers.

After British police broke up a plot to bomb trans-Atlantic flights in August, a liquids ban and stepped-up airport security meant longer lines and bigger headaches for travelers.

That hurt all airlines, but it affected low-cost carrier Southwest Airlines Co. even more so, analysts say.

The Dallas-based carrier specializes in shorter routes than its legacy competitors. Calyon Securities analyst Ray Neidl wrote in a recent report that some of Southwest's potential passengers likely drove to their destinations rather than deal with airport delays and carry-on restrictions.

Cathay Financial analyst Susan Donofrio wrote in a research note that Southwest's average flight length is less than half that of any of the major airlines, meaning it may have a slower revenue recovery.

Southwest said last week the heightened security measures drained away more than $40 million in August and September revenue, or 1.7 percent of its total $2.34 billion in quarterly revenue.

http://www.chron.com/disp/story.mpl/ap/fn/4286737.html

 

[Rhino]

SWA did not benefit from 9/11. SWA does best when the economy is booming and everyone makes money. SWA's highest profits are when all airlines are profitable.

SWA's D/E ratio is at a level that gives it tremendous cost advantages in several areas--low interest loans, low debt service, etc.

SWA's cost advantage has sharply narrowed--SWA's costs are creeping up (pay/benefits), while others have plummeted (pay/benefits).

Legacies are still getting premium revenues for int'l flights. That won't last indefinitely.

Unlike JB, SWA is seeking as many a/c as it can aquire and hiring is still very high.

Personally, I'm bullish on SWA stock. It's very cheap right now.