Swa To Slow Acft Deliveries

[SWA2000]

During Kelly's analyst meeting he said they are reducing the number of additional acft buy 15 for 2008. Planning on adding only 19. Also slowing growth to 6% vs. 8%. However, things can always change.

 

[RyansDad]

Is the glass half empty or half full....adding 19 aircraft and growing capacity by 6% is still growth! The article also says they are planning to generate additional revenue in other areas. Im sure everyone at SW would love to see higher growth numbers but only if the market can support it. Sounds like a responsible move on managements part.

 

[Whataburger]

Not great news, but I imagine there are a dozen airlines that would like to "only" get 19 brand new planes next year.

 

[Daddy]

I think we still get the 34 new ones, but we can a few more old ones...maybe the 500's

 

[GFunk20]

Yeah looks like the -700s will keep coming to replace -300s.

 

[RyansDad]

whats the best guess of how many new hires this will be for the rest of the year and 08 with additional aircraft and/or retirements? Also do you think this will have any impact on the LAS base opening in OCT?

 

[ALSF 2]

Not all that bad!

I personally think this is a smart move by the company. If the revenue is not increasing for each aircraft being brought on line, The company needs to rethink it's growth plan and correct the path of the company. This course correction will allow them to slow things down and focus on the returning to the kind of profitability that they want.


Cheers!

 

[Red Baron]

Southwest Airlines Announces Plans for Fourth Quarter and 2008
Wednesday June 27, 11:00 am ET Carrier Sets Course With New Initiatives; Additional Revenue Target of More Than $1 Billion
DALLAS, June 27 /PRNewswire-FirstCall/ -- Speaking to financial analysts and investors today after ringing the Bell on the 30th Anniversary of "LUV" trading at the New York Stock Exchange, Southwest Airlines CEO Gary Kelly outlined plans to improve the Company's profit growth. The airline will slow its fourth quarter 2007 available seat mile growth and optimize its flight schedule. In addition, Southwest announced it now plans to grow its fleet in 2008 by 19 net aircraft, 15 fewer than was previously reported. Kelly said slowing capacity growth will allow the carrier time to implement and evaluate the effectiveness of several initiatives Southwest intends to launch in fourth quarter 2007.
"Given the slowing U.S. economy and fuel cost pressures, we are taking these steps to adjust our capacity growth rate, which will help to restore profit growth," Kelly said. "If we find that conditions change, we will reevaluate our growth plans for future periods. In this economic environment, we simply need to take less risk and grow more slowly."
"For both fourth quarter 2007 and full year 2008, we currently plan to grow available seat miles (ASMs) year-over-year by approximately six percent, or about two percentage points less than previously reported. We also plan to implement a variety of revenue-enhancing initiatives by the end of 2007 that set the stage for continued profitability into the future," he said.
During fourth quarter 2007, Kelly said Southwest plans to: * Slow its available seat mile (ASM) growth to approximately six percent * Enhance its low-fare structure * Enhance its Rapid Rewards frequent flyer program * Launch a new advertising campaign * Unveil a new boarding/seating method
"We are very excited about major revenue initiatives that are scheduled for implementation by the end of this year. In all, we are targeting more than $1 billion in incremental revenue over the next few years to overcome higher fuel costs and reach our financial targets," Kelly said. Through the elimination of 39 existing roundtrip flights from its current flight schedule, Kelly said Southwest today has added 46 new roundtrip flights in key growth market cities such as Denver and New Orleans. For information on the flight changes in each city, go to: http://www.southwest.com/about_swa/press/070627_chart.pdf




Looks like some form of assigned seating is also on the way! As far as aircraft, I believe we most likely will give back leased ones, or some of the -500's. Only time will tell. At least our management is taking action now than later. Let's concentrate on the product we have and how to make it better.

RB

 

[CF34-3B1]

Looks like some form of assigned seating is also on the way! RB

It's an ICAO thing. We need to do it for the international routes.

 

[Full of LUV]

More revenue?

. We also plan to implement a variety of revenue-enhancing initiatives by the end of 2007 that set the stage for continued profitability into the future," he said.
During fourth quarter 2007, Kelly said Southwest plans to: * Slow its available seat mile (ASM) growth to approximately six percent * Enhance its low-fare structure * Enhance its Rapid Rewards frequent flyer program * Launch a new advertising campaign * Unveil a new boarding/seating method
"We are very excited about major revenue initiatives that are scheduled for implementation by the end of this year. In all, we are targeting more than $1 billion in incremental revenue over the next few years to overcome higher fuel costs and reach our financial targets," RB

I think they will raise revenue by offering first dibs on seats for a revenue "premium". Maybe like $5 gets you first boading priority, only the poor will sit in the middle.

Oh drats, world domination delayed by 6 months.

 

[SWA/FO]

only the poor will sit in the middle

or fly Delta.

 

[catIIIc]

Yeah this is very smart and will help all of us the long run, every bodies domestic yields are starting to fall so they have to find ways to get revenue up and slowing growth helps this. We did this at CAL by retiring 14-15 737's next year but we are still getting 30 800-900's which allows us to not drop to much capacity by replacing smaller 737 with larger ones. Any time LCC's try to raise revenue helps the whole industry

 

[Heavy Set]

Watch out for a LBB pull back, maybe to just 15 flights a day.

 

[SkiFishFly]

Sorry - It's my fault...

I updated my application last night...

 

[GhettoBeechjet]

It could be my fault

I interviewed last month. I somehow bet this doesn't increase my odds of getting a phone call.

 

[GuppyWN]

We are taking our 500th airplane this week and projected at 537 year end 2008.

Gup

 

[FlyinGuy]

I wonder how exciting the party is going to be with the new clouds that GK put over the place??

 

[FlyBarneyJets]

Clouds over the place???

Looks to me like GK put the company on a new course to stay out of the rainshowers to me. I'd much rather he do what he did than just keep on trucking with a plan that isn't generating the revenue we're used to.

 

[Palomino]

aircraft deliveries are slowing down...but the free Kool-Aid remains in plentiful supply!

sorry. i just had to. i keed, i keed.

fares going up is good for all. it seems all the airlines are tempering their growth in an effort to stay in the black. probably wise.

but let's face it. the fuel cost argument is a weak one. it's very simple. fuel goes up: ticket prices parallel the cost increase. airlines make money. all is well. even Southwest has to play the fuel game with the hedges tapering off in the near future.

now it's up to all of us to get our money back. our costs go up with inflation and stolen wages post-9/11. time to get it back. put it in the ticket price. the travelling public will still show up in droves and gripe about a 5 minute delay while threatening to sue the entire airline.

me thinks the good 'ol days are far behind us from a nostalgic perspective. but there's no reason we all shouldn't make good money with a good retirement.

thread drift?

 

[vetrider]

Not great news, but I imagine there are a dozen airlines that would like to "only" get 19 brand new planes next year.

I'd love to get 19 brand new Boeings. At my airline they are only gonna replace, at best, with pansie Airbuses. Even your "bad" news is better than most folks good news these days.

 

[SWA/FO]

Also this is slowing down 2008.........lots can happen for the rest of this year.

 

[Old School 737]

Wonder if getting those Ford airplanes was a good idea? Must have gotten them at a good price?

 

[PreContact]

What's the latest on Southwest's cargo-flying plans? Last heard about that a couple of years ago, but mentioned here http://www.chicagotribune.com/busin...st-story,0,817723.story?coll=chi-bizfront-hed again.

 

[huronip]

Big Announcement

I thought the big announcement was coming tomorrow when the 500th plane is delivered.

 

[canyonblue]

but let's face it. the fuel cost argument is a weak one. it's very simple. fuel goes up: ticket prices parallel the cost increase. airlines make money. all is well. even Southwest has to play the fuel game with the hedges tapering off in the near future.

Southwest raised ticket prices six times last year, which boosted its average fare by 11.4%, nearly double the pace of the prior year. When Southwest reported first-quarter results in April, however, Mr. Kelly indicated he had begun to see evidence that passengers are starting to resist fare increases. The airline's "unit revenue" -- revenue per seat, per mile flown -- didn't keep pace with the increase in unit costs.

Time for the other airlines to "put up". I don't ever want to hear of an airline that loses money quarter after quarter without raising fares. If this affects Southwest then every pilot out there might as well get used to their "new" wages.

 

[SWA/FO]

Canyon,

You want a two day PM on 7/23??? Pays 14.5

 

[WSurf]

I interviewed last month. I somehow bet this doesn't increase my odds of getting a phone call.

I know 2 guys that interviewed last month, and they both got the good phone call on the 22nd!

 

[FlyBarneyJets]

One thing people don't seem to be seeing is that the announcement said we'd net 19 aircraft next year instead of the original 34. There is no mention of "slowing delivery" of aircraft. I imagine that rather than decreasing deliveries of new (and more economical) -700s, we begin a program of retirement of older -300s and -500s instead. We're going to begin the whole RNP process soon. Why not start by getting rid of some of the airplanes that aren't RNP ready (or even capable in the case of the -500s)?

 

[The Prussian]

Canyon,

You want a two day PM on 7/23??? Pays 14.5

Hummm....Sounds like you got through upgrade OK...Congrats..

 

[SWA/FO]

Hummm....Sounds like you got through upgrade OK...Congrats..

Not yet, I'm thinking they are going to hold me back for attitude problems.