SWA 4Q profit slip amid higher costs

[jonjuan]

http://finance.yahoo.com/news/southwests-4q-profit-slips-higher-122155406.html

Southwest's 4Q profit slips on higher costs
Despite higher fares, Southwest Airlines 4Q profit drops to $78 million on increased costs

By David Koenig, AP Airlines Writer | Associated Press*****–*****3 hours ago
DALLAS (AP) -- Southwest Airlines Co. says fourth-quarter earnings fell by nearly half on higher spending for fuel, labor and maintenance.
The airline's revenue rose slightly, however, as the average fare climbed almost $8 higher than a year ago.
Southwest also said that bookings for the first three months of 2013 look strong. It said that based on bookings and ticket prices so far, a key revenue measure should rise by 2 percent to 3 percent in January compared with the same month last year.
Southwest, the nation's fourth-biggest airline, said Thursday that net income was $78 million, or 11 cents per share. That's down from $152 million, or 20 cents per share, a year earlier.
Excluding items such as fuel contracts, the net income would have been 9 cents per share, beating the 7-cents-per-share forecast among analysts surveyed by FactSet.
Revenue ticked up 1.6 percent to $4.17 billion but fell short of the $4.20 billion that analysts expected.
Expenses rose faster, however, by 3.1 percent. That includes a 4.5 percent increase in labor costs and a 13 percent jump in maintenance as the airline continued to overhaul the cabins inside many of its planes.
Spending on fuel, the airline's biggest expense, rose a modest 0.7 percent. Southwest estimated that its fuel bill in the first quarter, which ends March 31, will drop to $3.30 per gallon from $3.44 in the first quarter of 2012, which CEO Gary Kelly called "an encouraging trend."
The average fourth-quarter fare on Southwest and its AirTran Airways subsidiary was $148.02, up 5.4 percent from $140.38 a year earlier.
Passengers flew 1.4 percent fewer miles on Southwest than a year earlier, and planes were less full — 79.6 percent occupancy, down from 80.5 percent.
For all of 2012, Southwest earned $421 million, up from $178 million the year before and its 40th straight profitable year, which Kelly said was "a remarkable feat and a record unmatched in the airline industry."

 

[redflyer65]

Received well by Wall Street. All airlines doing well the last 3-6 months. I think 2013 earning are going to be good as well.

 

[jonjuan]

Received well by Wall Street. All airlines doing well the last 3-6 months. I think 2013 earning are going to be good as well.

Not so sure about UAL with a $723M yearly loss. Ouch
http://finance.yahoo.com/news/united-continental-reports-4q-loss-130916478.html

 

[redflyer65]

Not so sure about UAL with a $723M yearly loss. Ouch
http://finance.yahoo.com/news/united-continental-reports-4q-loss-130916478.html

Well, there's that....

 

[maxblast72]

Southwest Airlines (excluding one-time items):

$330 million net profit for 2011
$417 million net profit for 2012
$725 million net profit for 2013 (average of 18 Wall Street analysts estimates)

Southwest is doomed!

 

[Capn Butthead]

Southwest Airlines (excluding one-time items):

$330 million net profit for 2011
$417 million net profit for 2012
$725 million net profit for 2013 (average of 18 Wall Street analysts estimates)

Southwest is doomed!

When Mike "Lorenzo" V D V sends a letter out this week saying we cost to much he will be screaming the sky Is falling! But we don't need single engine taxi because it won't save money...and in the latest news the director of light bulb operation has been promoted to the VP of Staplers and is receiving a salary of $975,000.

 

[Andy]

Not so sure about UAL with a $723M yearly loss. Ouch
http://finance.yahoo.com/news/united-continental-reports-4q-loss-130916478.html

That includes $1.312B of 'merger related expenses'. Remove the PBGC payments that were triggered by the merger and UAL would be breakeven even with the other $600M in special charges.

Wall street seems happy, UAL is up 2.8%.

 

[slaquer5]

When Mike "Lorenzo" V D V sends a letter out this week saying we cost to much he will be screaming the sky Is falling! But we don't need single engine taxi because it won't save money...and in the latest news the director of light bulb operation has been promoted to the VP of Staplers and is receiving a salary of $975,000.

I hope yor kidding , I interviewed for that job and I am waiting to hear if I got .

 

[Secret Squirrel]

So what will profit sharing look like this year? Is it some derived formula that they have to plug into the supercomputer and wait a month until it spits out a numerical value?

 

[maxblast72]

Our operating profit was down a little versus 2011 while our net profit was up a little. I would guess our profit sharing percentage will be 3% (the 2011 amount) +/- 1%. I think we find out within the next 2-3 weeks.

 

[redflyer65]

So what will profit sharing look like this year? Is it some derived formula that they have to plug into the supercomputer and wait a month until it spits out a numerical value?

It is a formula. They usually announce the amount during one of the Mesaage to the Fields, which is right around the corner. It gets funded in September every year.

 

[Flyer1015]

SWA profits off its own pilots every time they force them to buy their own type ratings. They better be making money.

 

[redflyer65]

SWA profits off its own pilots every time they force them to buy their own type ratings. They better be making money.

Coming from a VA pilot, that's pretty funny. Kudos.

 

[LeeRoyJenkins]

SWA profits off its own pilots every time they force them to buy their own type ratings. They better be making money.

I didn't pay for my type rating. So how did I get hired at SWA then?

 

[slaquer5]

SWA profits off its own pilots every time they force them to buy their own type ratings. They better be making money.

We all can't be living the dream as a new hire at Virgin America .

 

[Flyer1015]

Defensive are we?

If you didn't pay for the 737 type, that means you got it from somewhere else, either another airline, through one of those scholarships, or won it in a raffle.

Fact remains, despite SWA's ever historical profitability, they make pilots obtain their own 737 types beforehand, whereas every other airline takes care of that when you're hired. Not an ultimatum that you have 6 months to go obtain it...

So why are you defensive about this practice?

 

[canyonblue]

Defensive are we?

If you didn't pay for the 737 type, that means you got it from somewhere else, either another airline, through one of those scholarships, or won it in a raffle.

Fact remains, despite SWA's ever historical profitability, they make pilots obtain their own 737 types beforehand, whereas every other airline takes care of that when you're hired. Not an ultimatum that you have 6 months to go obtain it...

So why are you defensive about this practice?

That's a clown question bro, as any SANE pilot would notice, your first year pay would be $53,352 at SWA's 78 hour guarantee or $36,960 at VA's 70 hour guarantee. Most would gladly pay the $7,000 to get on the right list. Of course you would upgrade faster at VA and bring home a minimum of $103,320 as a Captain in your 4th year pay. And that guy who went to SWA would still be an FO only bringing in a minimum of $111,384. So yeah, I guess many are defensive when it comes to explaining the reasoning behind paying for your own type rating. If it has to be explained to you, you obviously have no clue on how you research an airline for possible employment. That, or you interviewed and were rejected. My guess is both.

 

[DUBLINFLYER]

Don't foget the tax relief on the $7,000 (education)

 

[Flyer1015]

That's a clown question bro, as any SANE pilot would notice, your first year pay would be $53,352 at SWA's 78 hour guarantee or $36,960 at VA's 70 hour guarantee. Most would gladly pay the $7,000 to get on the right list. Of course you would upgrade faster at VA and bring home a minimum of $103,320 as a Captain in your 4th year pay. And that guy who went to SWA would still be an FO only bringing in a minimum of $111,384. So yeah, I guess many are defensive when it comes to explaining the reasoning behind paying for your own type rating. If it has to be explained to you, you obviously have no clue on how you research an airline for possible employment. That, or you interviewed and were rejected. My guess is both.

So the excuse is higher pay than VX? Why are you comparing a legacy SWA to a new entrant LCC? Why not compare yourself to United and Delta? They too have comparable rates for the 737, yet, don't require you to bring your own rating. And not to mention, even if your excuse is valid, the pay thing is only valid post 9/11, in the last 10 years. That was when legacy carriers took concessionary contracts and SWA didn't. But prior to 9/11, and throughout its existence, SWA was the bottom barrel in 737 pay and still required a pilot to obtain their own 737 type rating. So what's your excuse then?

 

[slaquer5]

But prior to 9/11, and throughout its existence, SWA was the bottom barrel in 737 pay and still required a pilot to obtain their own 737 type rating. So what's your excuse then?

I will put a SWA captain W2 against any other airline you pick prior to 2001.

You do not know what you a talking about. Just another SWA, hater.


PLC.... I know, I know I have a small johnson

 

[canyonblue]

I will put a SWA captain W2 against any other airline you pick prior to 2001.

You do not know what you a talking about. Just another SWA, hater.


PLC.... I know, I know I have a small johnson

At least slaquer gets it. That's the point I was trying to make to him also. My argument was for the post 9/11 candidates, the pre 9/11 still did far better than their contemporaries with the stock options and the profit sharing. You're clueless Flyer1015 when it come to the industry, either you're not a current pilot, or you've been on Gilligans Island for the past 13 years and the radio's broke.

 

[Flyer1015]

So the excuse is still, pay, profit sharing, and stock options justifies it? Maybe Delta and United management could learn a lesson here. Pay enough on paper, with promises tied to profit sharing, and pilots will line to buy their own type ratings. Hopefully, not everybody. But in those pilot contracts, they have it written that pilot will not be required to pay for training or activities associated with doing a pilot job.


Please, there is no valid excuse for a consecutively profitable airline in history to keep on keeping that silly requirement. This isn't a enty level regional job PFT, this is a legacy carrier that is making money and yet requires you to earn the job type rating elsewhere. If one is hired for a job, the training required for the duties/performance of that job should be paid for.

Here's a question, if hired at SWA, and you don't obtain the 737 type rating within 6 months as they ask, what can happen then? If they fire you, then that's all one needs to know about this practice.

 

[redflyer65]

It's funny when people complain about what Southwest guys made in the past. Not knowing those guys had hundreds of thousands of dollars in stock options at the time. Hundreds of guys that retired multi-millionaires, but it doesn't fit very well into their arguement.

 

[Flyer1015]

Stock options works out well when the times are good, not so much when they're not.

 

[FlyinGuy]

That is why stock options are not part of our "game" right now.

 

[redflyer65]

Profit sharing was huge then too Flyer1015. Sometimes hitting 15% for multiple years, along with the stock options. Those guys cleaned up.

The payrates are now alot higher than then. I'd say we are still doing just a little better than okay.

So 40+ years of profit, year after year. Stability in an industry that's unheard of.

You don't like it, don't apply. Work for VA. Good luck there.

 

[HowardBorden]

That was when legacy carriers took concessionary contracts and SWA didn't. But prior to 9/11, and throughout its existence, SWA was the bottom barrel in 737 pay and still required a pilot to obtain their own 737 type rating. So what's your excuse then?

My excuse is "I didn't work there then."

 

[Flyer1015]

Instead of a "if you don't like it, don't apply" why not a "we should get SWAPA to put this on the table for negotiations next time." You know, to get in line with the industry standard. Pay, profit sharing, stock options do not justify this kind of practice.

 

[scoreboardII]

Instead of a "if you don't like it, don't apply" why not a "we should get SWAPA to put this on the table for negotiations next time." You know, to get in line with the industry standard. Pay, profit sharing, stock options do not justify this kind of practice.

Let me get this straight, you really want to work at SWA but can't scrape the cash together or are not smart enough to have another company /military foot the bill so you want SWAPA to change our contract which already has a no pilot pays for training clause, right?

You little minded folks can't seem to understand everyone pays for training: your private pilot license, commercial, instrument, multi, CFI, a lawyer pays for his school, same for Dr's, same for plumbers, same for contractors. Maybe the other airlines suck so bad they have to let the riff raff in who come unprepared... News flash: NOT SWA.

 

[SWA Bubba]

Instead of a "if you don't like it, don't apply" why not a "we should get SWAPA to put this on the table for negotiations next time." You know, to get in line with the industry standard. Pay, profit sharing, stock options do not justify this kind of practice.

I see it's time for another round of "I got nothing else, so I'll play the Southwest PFT card again!"

Why do you keep harping on this? Seriously? Different airlines have different minimums. For SWA, it's ATP, 737 type, and 1500 turbine PIC hours. Other airlines require less hours, or no type, or not even ATP. It's up to them to decide what they want, and up to you to get it if you want to apply there. SWA doesn't require a 4-year college degree; others do. Why don't you give grief to Delta for requiring a college degree of their applicants when we don't? Why don't you give grief to airlines requiring ATP when some others don't? Clearly this is just the piddly-crap you've come up with to bash SWA. 'Cause you don't like our minimums? If that's all you've got, then I feel pretty good about my choice of employer.

Why does SWA still require it? I don't know for sure. In the beginning, I suppose it was to make sure that you really wanted to work here (a new airline) and weren't as likely to bolt after training and stuff. Nowadays, while clearly they could probably do without, it still ensures that SWA attracts applicants who really want to be here. Plus, this way, they know you're qualified to be a captain when you start; fewer surprises later. Also, since they know you're qualified on the only airplane we've got, that allows the interviewers to concentrate on finding out about your personality, and whether they want to sit next to this guy for hours at a time.

To answer your other question about the six-month thing, and if they "fire you" if you dont' get the type rating by then. You actually only get "provisionally hired," without the type if you pass the interview, but you can't start newhire training until you get the type rating within six months (that is, finish satisfying the company's hiring minimums).

Well, there you go--answers to your questions. Although I suspect you really weren't looking for real answers--you just want to bitch about Southwest. However, it really is as simple as Scoreboard says: if you don't meet the minimums for any job position (whether that be so many hours, an unrelated college degree, or whatever rating or ratings), then you can't apply. If you wanna' bitch, then knock yourself out. However, you'd be better off utilizing your time applying to a company whose minimums you DO meet, or work to increase your personal qualifications. Your choice.

Bubba