3rd Qtr. Earnings at SWA

[Maynard]

DALLAS, Oct 17, 2002 /PRNewswire-FirstCall via COMTEX/ -- Southwest Airlines' (LUV) net income for third quarter 2002 was $74.9 million, compared to third quarter 2001 net income of $151.0 million. Net income per diluted share was $.09 for third quarter 2002, compared to $.19 for third quarter 2001. The Company's third quarter net income for both 2002 and 2001 includes special items resulting from last year's terrorist attacks. Excluding the special items, third quarter 2002 net income was $50.5 million, or $.06 per diluted share, which compares favorably to First Call's consensus estimate of $.05 per diluted share. The Company's third quarter 2001 net income, excluding special items, was $82.8 million, or $.10 per diluted share.



Special Items

Pursuant to the Air Transportation Safety and System Stabilization Act (Act), which was enacted following last year's terrorist attacks, the Company recognized $48 million and $169 million as "Other gains" in its Condensed Consolidated Statements of Income for third quarter 2002 and 2001, respectively.

Third quarter 2001 results also included special charges of approximately $58 million arising from the September 11 attacks. The prior year charges included a $30 million reduction in "Passenger revenue" resulting from estimated refunds of nonrefundable fares; $15 million in charges to "Other operating expenses" for write-downs of various assets due to impairment; and other charges that were included in "Other (gains) losses, net."

"Following September 11, 2001, Southwest's fleet growth slowed considerably. As we continue to cautiously resume our growth plans, we have accelerated delivery of one 2003 and two 2004 Boeing 737-700 aircraft to fourth quarter 2002. We have also exercised two future options for accelerated delivery to fourth quarter 2002 and four future options for accelerated delivery to 2003. These changes bring our total planned deliveries for 2002 to 23; 2003 to 17; and future commitments, including options and purchase rights, to 396 aircraft for 2004 through 2012.

"Southwest announced today that additional service will be added to our existing route system during fourth quarter 2002 and first quarter 2003. In addition to introducing new nonstop service between Baltimore/Washington and San Jose, we plan to add additional frequencies between Baltimore/Washington and Orlando, Birmingham, Fort Lauderdale, Manchester, Hartford, and Tampa.

 

[Slug]

Finally, something of a good post

I really like those last two paragraphs.


Slug

Patiently waiting

 

[G4G5]

Slug,
Did you spend any time over at NWA?

 

[T1bubba]

Do you know the way to San Jose?

Accelerated deliveries, exercised options, new service... music to my ears!

If I read this correctly they are getting 5 new 737 in the 4Q - does anyone know if they are retiring any -200's in the 4Q or will this be all growth? About 50 pilots should equal 2 new classes IF they are trying to maintain the current manning levels. Of course, they took 4 deliveries in Aug-Sep and only ran one class to cover it so they may try to keep increasing the flight-crew utilization.

Either way, this is great news!

On an unrelated note, how hard is it to get from SJC to OAK?

T1bubba
future BWI-OAK commuter

 

[pegasus]

yes

yes yes yes yes YES

Bring it on
AT LAST, A LTTLE RAY OF SUNSHINE

 

[PTinbound]

T1, just get a car and drive

Now as for the airplanes, I'm all confused now. In plain English, could someone explain how many airplanes they have recieved/are getting in 2002 vs the previous expectations, and again the same question for 2003. Up until now, I was under the assumption that they were pretty much done for this year, and next year was to be about 8 airplanes of growth (14 700's - 6 200's = 8).

What is it now? Anyone?
Tred, you may have to cough up the beer soon.

 

[T1bubba]

PT, I'm hoping I won't be based in OAK long enough to buy a car!

As far as the aircraft go, the release only talks about deliveries and doesn't mention the -200 retirements. But it looks like deliveries have increased by 5 for 2002 and 3 for 2003.

 

[PTinbound]

I concur. I just listened to the webcast, and here's what I got:
5 more airplanes for this year,
17 new deliveries (up from 14) for '03, - the 6 200's, = 11 net new airplanes next year.
5+11=16 new airplanes between now and next year.
At 11 pilots per airplane, figuring in 57 retirements, I'm guessing there will be 233 new Kool-Aid drinking pilots by the end of '03.
Now, this still won't drain the whole pool, but it sure does help.
I'm all for good news.
And with that, T1, you are right. If you multiply your rank of 26 by the PT poolie factor of 1.4979, you will be in the second class. With a steady influx behind you, you won't be in OAK for long.
Most of the expansion is coming to BWI anyway.

 

[Aplus9]

"If you multiply your rank by the PT poolie factor of 1.4979"

Nice formula PT.

This means I could be in the shallow end by the end 2003. I will take whatever I can get. Thanks for the post Maynard.

 

[Krunch]

When will Interviews Start...

So with this breath of fresh air and some good news when will they (SWA) start working on the stack of qualified candidates they have been mailing letters to ???

"Krunch"

 

[Bake]

Anyway you look it this it is GREAT NEWS!! Whether they fill those airplanes with new trainees or if they use current employees, it means company growth. I think all of us would be wrong if we said that they could fill this many aircraft without training at least one class late this year or early next year.

Bake

 

[emb120]

Hey Guys, for what it's worth:
There seems to be a lot of open time in OAK, and a lot of junior manning going on. I can't say about the other domiciles, but OAK seems to be short on FO's.
Good luck!!

 

[OPIE01]

HELP!!! This Air Math is killing me.

"If you multiply your rank by the PT poolie factor of 1.4979"

You dudes are Scaring me with this Math stuff. Since I am #138 on the unofficial list I called Lindsey Lang and asked her if there would be a chance I would start before Mid-June 03. She said, “Probably not.” So I asked her if it would be ok if I took a Math teaching job at a School in a Low Income area, and that I felt it was only right to commit to teach there only if I taught the rest of the school year till Mid June. She said, "Good on you, go for it."

I was told today by the principle that I would be teaching Algebra I to 8th graders. Then I saw your math equation and thought to myself, "Algebra I, Man I am having a hard time understanding PT’s math Calculations."

Are anyone's kids out there doing Algebra, can I pay to have them Tutor me via the Internet.

When I applied for the Job, I thought: "All I have to do is stay one day ahead of these kids."

 

[MLBWINGBORN]

To get from Oak to SJC you can take the BART..

All you need to do is take a short cab ride to the station..I would not however be caught on the landing at OAK station at night unless I was in a group or armed..IMHO..

 

[MLBWINGBORN]

As for classes/interviews..

Greg Crum has been recently quoted as saying not to expect any new hiring until after April 2003..The continued caution is being blamed on so far what has been horrible bookings in the 4thQ of 2002..

As for aircraft numbers..The company can take aircraft from Boeing and park them in the desert or replace out going 200s at will..Im not to sure we can consider the revised delivery numbers to be of great importance..Yet..

It is however interesting that they are painting a picture of doom and gloom and accelerating aircraft deliveries at the same time..

SWA has always taken advantage of soft markets to expand their route structure..This would be a classic move on their part if they were to suddenly turn on the fire hose of expansion..

The only problem I see is that what ever they do it takes six weeks of lead time to put FOs in the newly purchased 700s..To suddenly start classes again in this market would be a strong indicator of bigger plans in the near future..

IMHO 2003 is going to be a banner year for expansion when you consider the possibilitys avalible in the northeast alone..

It may be a bit soon to break out the Wild Turkey...But I wouldnt think it would be a bad idea to stock up...Just in case..

 

[dhampton]

The extra planes in Q4 is great news boys... I hope you swimmers remember where you left your towels.

 

[T1bubba]

I just listened to part of the webcast, here are some other highlights...

Delivery schedule as of 10/17/02
2002 4Q - 5
2003 1Q - 1
2Q - 4
3Q - 6
4Q - 6
but the situation is "dynamic"

The new BWI-SJC route will start in Jan, the additional frequencies from BWI will start in Dec and Jan.

No change in the long-term growth plan. Well positioned to accelerate growth if the economy improves.

Looking to decrease the number of employees per aircraft, mentioned that flight operations had hired last quarter not knowing what the aircraft delivery schedule would be.

Load factors on the new transcons have been "extraordinarily strong" , so they're adding another.

As always, everything is subject to change.

 

[chase]

4Q Bookings

I stopped by the Oklahoma Reservation Center (ORC) on 30 Sept & spoke to people in the know. They predicted then we would show a profit. What was most interesting though is that bookings for 4Q were looking more favorable than they were merely 2 weeks earlier. The trend was definitely upward. Not necesarily rocketing to the moon but on an upward trend.

SWA management has always taken a very cautious outlook toward predicting the future earnings of the company when speaking to investors or the public. Now is no different. We are 50% less than last year at this time but there were also two good months in 4Q'01 results that this this past qtr didn't have. Loads were good for a mid-week all Texas trip I flew earlier this week. Hang in there, we'll turn the corner soon I'm hopeful.

cheers,

 

[dhampton]

From the 10/17/02 Press Release

Southwest Airlines Co.
Boeing 737-700 Delivery Schedule

Prior Schedule | Current Schedule
Firm / Options*| Firm / Options*

2002..... 18/ -- | 23/ --
2003..... 14/ -- | 17/ --
2004..... 23/ 13 | 21/ 13
2005..... 24/ 20 | 24/ 18
2006..... 22/ 20 | 22/ 16
2007..... 25/ 29 | 25/ 29
2008..... 6 / 45 | 6 / 45
2009-12 -- 177 | -- 177
Total . 132/304| 138/298

 

[w8n4swa]

Seeing the light!

This makes my day....Great thread!! Keep it coming!

 

[olladriver]

To get from Oak to SJC you can take the BART..

BART only will get you to Fremont. I believe there is connecting bus service from the Fremont station to SJC. Allow plenty of time, the traffic on HWY 880 and 680 is notorious, especially during peak commute times.

Olladriver

 

[tredding@swa]

Coughing Beer....

Hey PT, from your post;
"Tred, you may have to cough up the beer soon."

I am MORE than ready to cough up the beer.... at least it will get the chlorine taste out of my mouth from all this pool water I have been "coughing up" lately!!!

Open the doors to the school house & let us IN!!!!!

For the SJC-OAK commuter..... best to just jump seat to OAK unless you have an airport car in SJC/ I lived in the Bay area for 12 years, that's a bad commute.... can take 2 hours to go 20 miles!

Have a great weekend everyone - Regards, Tred

 

[LiveFreeorDie]

A Turd in the Punch Bowl

Thoth has the right idea. Some people here are reading too much into this news.

Don't get me wrong, the expansion is great for the long-term prognosis, but it probably will have little to do with short-term hiring.

SWA is just bargain basement shopping for new planes. I heard from some "insiders" a few months ago they were already planning on expanding the fleet without hiring additional pilots.

I am hoping for the best, but planning for the worst.

This news means little to us poolies. The real test will be first and second quarter profits next year, and better news from the war on terror/Iraq. As long as a potential war and high oil prices loom, the management will probably take a "wait and see" approach--we should all do the same. (As if we have a choice.)

See you in 2004

 

[CoopDog]

Any growth opportunites here?

Hi folks. I just read on www.atwonline.com that American is going to park an additional 42 airplanes very soon (28 MD-80's and 14 767's). If you look at lost capacity alone, that equates to 5880 seats per day, or about 2940 more available butts (if you just assume they had an average 50% load factor). These planes are going to be parked until 2005, according to the article.

So assuming these 2940 available butts need a seat and would like a nice fare to soften the wallet, SWA might just need to consider acquiring some more airplanes in 2003.

Just a thought. Good opportunities don't come along every day. Let's pass the word.

 

[CoopDog]

BTW, I meant no disrespect to the wonderful folks who pay the fares on the fine aforementioned airlines. It wasn't my intention to make any paying passenger, i.e., PAX, the butt of one of my jokes. We all appreciate your business. You're now free to move about the country.

 

[CoopDog]

For those of you who are more adept with ASM's, RPM's, CSM's, and all that other jive, sorry. My reasoning with seats per day doesn't make sense. I should have made the comparison using seats per flight instead of seats per day. I have no way of knowing the utilization and number segments per day of the MD-80 and 767. That would be too much effort this late for a dude like me.

All I was really trying to say was, there's a lot of good potential for more growth here by SWA.

It's late and I feel about like Al Pacino in "Insomnia." Thank God it's dark outside. See ya.

 

[NEO]

I agree with thoth and livefree man. Eventhough SWA is taking on more planes, new routes and frequencies; they will not train new F/O's until the existing ones are sufficiently utilized. However, IMHO, I do not believe SWA will be able to absorb the announced expansion into the current rank and file for the long run.
What we poolies need is CURRENT information on load factors, JA rates, open time, reserve utilization, ect... (including the actual number of military pilots who suprised SWA by comming back early).