Outlook for SWA?

[GuppyWN]

OK. Back to the topic at hand.

SWA still has one of the lowest operating cost in the business. Our CASM minus fuel is the lowest it's been since 2000.

Will upgrades slow? For 2008 it appears so but I will remind you that we ARE hiring and upgrading pilots and as short as this spring we were saying we couldn't find airplanes fast enough and leased/purchased 4 700's from the secondary markets. This management is doing just that, managing the airline, not letting the tail wag the dog.

Ask you AA buds how long the upgrade is over there. Or United, or Delta. Folks were still buying new jets to ADD to the fleet, not replace older airframes.

Will the train grind to a halt? I suspect it will sometime in the future. The question is when? We have 500 jets. We board more passengers in this country than any other airline and we have LOTS of new airplanes on order. We only serve 63 markets in the whole country, THIS country. Just stick around awhile, this one trick pony is educating themselves on international ops.

What happens when the 737 line stops? Who knows. Boeing WILL bring a new type online in the next several years that is tailored to short/mid range markets.

I am still bullish on this joint and think we have the right people in place to make the right decisions.

Amen.
Gup

 

[Big Beer Belly]

Yeah, yeah, yeah, and you did it in your green flight suit and all of the french male waiters swooned over you. Thanks Maverick. (or Goose?) I am soooo glad you are happy to go to LBB. Guess what Iceman? At Delta we can CHOOSE to fly either INTL or domestic. Isn't it great to have an actual choice, even in aircraft type too? Ah, you don't care----you are going to go to the Awful House (wafle house) in Midland for a great T-Bone steak. Sounds gooood. So, do you miss that military 757 you flew? Great power, eh? Do you think about it when you are flying a 737-300 in West Texas at 105 degrees F? I bet you do. Ah, atleast you had the experience in it for awhile. I fly it all the time, it is wonderful. What a sexy bird. Some of our newhires are getting hired directly onto it. Enjoy that T bone.


Bye Bye--General Lee

FWIW.... General... I always get a chuckle out of your posts! The SWA guys as a group are absolutely scared to death to leave the CONUS... end of story.

Their fear is disguised as bravado... how they love Amarillo... or don't want to be caught dead in Sydney (because they're to far from home???...)

Fact is... international flying (ETOPS/alternate/ China/polar considerations) does add an element they're no doubt unfamiliar with but it's not Voodoo magic like many of them speak of.)

International flying can be an absolute hoot (with a good crew, as anywhere) and is a great way to see the world and experience things you wouldn't otherwise stateside (pyramids, castles, pubs, cathedrals, etc... ad nauseum)

Personally, after having been privileged to visit over 80 countries/territories SO FAR... I wouldn't trade it for the world! I think I am blessed to have a much broader perspective on world events than some of my neighbors.

YMMV,

BBB

 

[Flyarcticcat]

FWIW.... General... I always get a chuckle out of your posts! The SWA guys as a group are absolutely scared to death to leave the CONUS... end of story.

Their fear is disguised as bravado... how they love Amarillo... or don't want to be caught dead in Sydney (because they're to far from home???...)

Fact is... international flying (ETOPS/alternate/ China/polar considerations) does add an element they're no doubt unfamiliar with but it's not Voodoo magic like many of them speak of.)

International flying can be an absolute hoot (with a good crew, as anywhere) and is a great way to see the world and experience things you wouldn't otherwise stateside (pyramids, castles, pubs, cathedrals, etc... ad nauseum)

Personally, after having been privileged to visit over 80 countries/territories SO FAR... I wouldn't trade it for the world! I think I am blessed to have a much broader perspective on world events than some of my neighbors.

YMMV,

BBB

Flying international, lets see if half of the pilots come from the military then I would think they have alot international experience no matter what airline you work for. If and when SWA decides to go international they will do it right and have a ton of fun along the way.

 

[GuppyWN]

Hey BBB I'm not at all afraid of foriegn countries. Matter of fact I was just in El Paso last night.

Gup

 

[IronCityBlue]

Partially true.

Fuel prices are rising, and Southwest is feeling the pinch.

However, Southwest still has the lowest CASM ex-fuel in the business. In other words, if you were to take fuel out of the equation for all the airlines' CASM, Southwest would still have the lowest costs. So if all airlines were paying the same price for fuel, and there were no such thing as hedging, SWA would still have the lowest CASM. And of course, in a commodities market such as the airline industry has become, the producer with the lowest costs has the best advantage - they set the prices for a given market.

So while Southwest definitely has some challenges right now, and things certainly aren't as easy as they once were, I think people who say, "They'll lose their pricing power once those hedges run out" are not looking at the bigger picture.

Just a thought...

Exactly. Its funny to watch the analysts and pilots marching in lockstep on this topic. So according to the "SWA is doomed when their hedges run out" crowd, its actually better to have never been so incredibly well hedged, because when those awesome hedges expire you're somehow screwed.

SWA was phenomenally well hedged. They made some massive profits. Now they are hedged at or slightly above average (still a nice ammount of 50/bbl hedges) and still have a very low cost product from top to bottom. Pilot pay is high, but so is pilot productivity.

So to some it would have been better if SWA never made massive profits for the last few years and insiead just made small profits. I disagree with that line of reasoning. If you're making steady but modest profits, then you can have 4 or 5 VERY strong years and bank it (stock buybacks, debt reduction, cash stockpiling, internal investment, etc) and then return to modest profits, then IMO you are better off than you were.

Of course when SWA has to start paying for their 73's at the 50 year mark (coupled with when they are out of warranty), then they are really screwed! :laugh:

 

[General Lee]

FWIW.... General... I always get a chuckle out of your posts! The SWA guys as a group are absolutely scared to death to leave the CONUS... end of story.

Their fear is disguised as bravado... how they love Amarillo... or don't want to be caught dead in Sydney (because they're to far from home???...)

Fact is... international flying (ETOPS/alternate/ China/polar considerations) does add an element they're no doubt unfamiliar with but it's not Voodoo magic like many of them speak of.)

International flying can be an absolute hoot (with a good crew, as anywhere) and is a great way to see the world and experience things you wouldn't otherwise stateside (pyramids, castles, pubs, cathedrals, etc... ad nauseum)

Personally, after having been privileged to visit over 80 countries/territories SO FAR... I wouldn't trade it for the world! I think I am blessed to have a much broader perspective on world events than some of my neighbors.

YMMV,

BBB

Some of these SWA guys are a bit uptight, but I can understand "luv" for one's company. That's great and dandy. But, when I bring up some actual FACTS (domestic flying only, multiple leg days, 25 min turns, one aircraft type, and the possibility of actually flying to LBB, MAF, AMA, or beautiful HRL) they become unglued. HOW DARE I SAY ANYTHING CORRECT ABOUT THEIR RELIGION/COMPANY. It is humerous. But, I also say good things---like the pay, the fun stews, and the management (for now). Even though I show some possitive things I like about their jobs, they actually go after me personally. Oh well, I can handle it. It is as if layovers in LBB/MAF/AMA/and HRL were their dirty little secrets...... And oh yeah, their leather jackets are corny.


Bye Bye--General Lee

 

[General Lee]

Hey BBB I'm not at all afraid of foriegn countries. Matter of fact I was just in El Paso last night.

Gup

There you go! Some humor! Ahhhh yeah. You must have been an ex regional guy.

Bye Bye--General Lee

 

[GuppyWN]

And oh yeah, their leather jackets are corny.


Bye Bye--General Lee

A guy wearing a double breasted blazer calling my leather jacket corny? Now THAT'S classic.

Gup

p.s. Hey General can we call a truce on the Vienna vs. Midland already? It's a JOB, not a yardstick.

 

[StopNTSing]

Exactly. Its funny to watch the analysts and pilots marching in lockstep on this topic. So according to the "SWA is doomed when their hedges run out" crowd, its actually better to have never been so incredibly well hedged, because when those awesome hedges expire you're somehow screwed.

SWA was phenomenally well hedged. They made some massive profits. Now they are hedged at or slightly above average (still a nice ammount of 50/bbl hedges) and still have a very low cost product from top to bottom. Pilot pay is high, but so is pilot productivity.

So to some it would have been better if SWA never made massive profits for the last few years and insiead just made small profits. I disagree with that line of reasoning. If you're making steady but modest profits, then you can have 4 or 5 VERY strong years and bank it (stock buybacks, debt reduction, cash stockpiling, internal investment, etc) and then return to modest profits, then IMO you are better off than you were.

Of course when SWA has to start paying for their 73's at the 50 year mark (coupled with when they are out of warranty), then they are really screwed! :laugh:

Something else that is getting under-reported is the unsustainably low costs the Legacys are enjoying right now. Even with gutted labor contracts (that will only increase with time) and operations that seem held together with duct tape & bailing wire from all the staff cuts (that will have to be replaced to improve service), they STILL can't get their CASM in line with SWA. :beer:


P.S. Will you guys please STOP FEEDING THE TROLL...err...GENERAL! If we ignore him maybe he will finally go away. :smash:

 

[General Lee]

A guy wearing a double breasted blazer calling my leather jacket corny? Now THAT'S classic.

Gup

p.s. Hey General can we call a truce on the Vienna vs. Midland already? It's a JOB, not a yardstick.

Yeah, but the chicks dig our Russian Boat Commander uniforms. They swoon when they think we are going to CONQUER THE SKIES!! It looks professional, rather than James Dean-ish.

And, I would love to get off this topic, but anyone who slams me gets a retort. You know that is how I operate. Have a good night.

Bye Bye--General Lee