Could Southwest's run of profitability be coming to an end?

[StopNTSing]

Well barring your experience I think across the board there is little comparison. Delta has adapted much of what was on Song and I can tell you from first hand experience it is being well received. Do a word association with John Q. Public and throw the name Southwest Airlines out there and you will get "Cattle Car Operation" followed by "Low Prices".

...followed by "Largest Domestic Carrier in the United States"

Alaska is now facing a direct assault from VA on a model that has worked for them for years (read "can AK survive assault from VA" thread) and this is not unlike how many in the industry are raising the bar while SWA rides its old worn out ways. Alaska is trying to rise to the occasion but they have alot of ground to cover. Dont get me wrong, as a pilot I hate VA and think they are one of the new cancers to add to the long list of LLC's but they bring a new game to town as far as competition/amenities go, far beyond the no frills show SWA continues to try to run with.

PS- I suggest riding in the back on another flight because the advantages I am talking about are large in part found on the actual airplanes during the flight and not at the gate.

As a commuter, I often do ride in the back of several other airlines. Some of the "advantages" I see too often are four a-breast narrow seats, little overhead bins, nothing on the seatback but a tray (which is a lot closer to my knees than on one of SWA's ugly jets) and cloth seat cushions that feel like a concrete block after 30 minutes.


P.S. I too, hate those cancerous Limited Liability Corporations

 

[luv2fly]

7 million cash? really? that would be over 58,000 shares of stock at 12 bucks/share.

but you did say "cash" and not "stock."

Actually, the guys you are talking about had about around 38,000 shares at $3.88 strike price. Those options expired over a year ago.

 

[727C47]

You guys crack me up,with all due respect,SWA is an awesome company, it has excelled through times both lean and lush, all this harping is just sour grapes, I don't fly for SWA,I just have had the pleasure of their jumpseat on numerous occasions, and my wife is currently swimming in their hiring pool. Their track record speaks for itself. And Herb Kelleher is worth every ducat he is graced with and more, a few more CEO's like him ,and none of you other brand gents would be bitching and moaning. End of rave. Best of luck to DAL,NWA,CAL,UAL,AA ,et al, I wish nothing but the best for all of you,indeed I have friends and family at every company mentioned,but enough with the schadenfreude (spelling?) already !

 

[YourPilotFriend]

That's what we call "Owned" lady's and lady's. Nice work dude.

You know why you think i'm owned? Because it is very hard to find out what Herb has really received from SW. Over the years he has kept his salary rather low, however he has received over $200 million in stock awards. Ask him yourself if you don't believe me......I have.

 

[YourPilotFriend]

It's really not all that hard to find the info. Why you continue to spew the wrong information is beyond me.

Here is Kelly's Compensation:

http://www.unitedafa.org/news/ceo_chart.asp

Gary's, Collen's and Herb's Compensation vs Arpey at AMR:

Airline CEO compensation numbers

11:46 AM Sun, Nov 11, 2007 | Permalink
Terry Maxon E-mail

News tips


A communications guy at the Allied Pilots Association passed on some numbers Sunday morning, none of them new:


AMR chairman, president and CEO Gerard Arpey's total compensation for 2006: $10,201,059.


Southwest chairman Herb Kelleher's total compensation for 2006: $1,365,000.

Southwest president Colleen Barrett's total compensation for 2006: $1,256,935.

Southwest CEO Gary Kelly's total compensation for 2006: $1,405,883.


So the AMR chairman, CEO and president (one person) made $10,201,059, and the chairman, CEO and president of Southwest (three people) made $4,027,818.


Breaking that down, Mr. Arpey had $581,534 in salary; the Southwest trio had $1,229,347. In bonuses, Mr. Arpey got nothing; the Southwest trio got $1,277,000.


So in salary and bonuses, Mr. Arpey earned $581,534; the Southwest trio earned $2,506,347.


Under the Securities and Exchange Commission rules on reporting executive compensation, Mr. Arpey's total soared primarily on the assumed values of stock awards ($8,558,878) and option awards ($851,398). The option awards for the



Southwest trio totaled only $1,180,157.
Apropo of nothing, SEC filings indicate that Mr. Kelleher has sold 425,000 shares of Southwest stock this year for $6.46 million. At the start of the year, he had around 3.47 million shares of Southwest stock; after some Oct. 30 sales, his holdings were down to 3.05 million shares.


Mr. Kelleher exercised options in July to acquire 60,000 shares at $16.40. His average sale price this year has been about $15.21 a share. His October sales were for $14 to $14.10, depending on the day.


Mr. Arpey in April received and quickly sold 207,900 shares he received in a stock performance plan that riled the unions and other employees. He grossed $6.18 million from those shares, plus another $1.51 million from stock options he exercised for about $438,000.

So why does Gary Kelly stay at SW when he can come over to any other airline and make ten times as much and not even have to work for it??? Is he stupid??

 

[Tanker Clown]

Maybe he doesn't want to preside over a disaster at one of the legacies. I'd personally get more satisfaction growing a successful company vs. fleecing a dying one.

 

[328dude]

You know why you think i'm owned? Because it is very hard to find out what Herb has really received from SW. Over the years he has kept his salary rather low, however he has received over $200 million in stock awards. Ask him yourself if you don't believe me......I have.

Cool, takes a lot of skill to back pedal that much. Thanks for playing.

Next?

 

[Jim Smyth]

Herbs worth every penny he made and should have been paid more, Gary too! Show me another airline CEO/Board member thats been at the helm for as long as Herb has and hasnt rapped the company blind with all the golden parachutes.

The reason Herb and Gary are still around is because they enjoy there job and have fun at it! Plus there both Texans and its called professional pride for there company!

 

[SWA/FO]

The one's retiring today are leaving typically with 3-4 Million cash!

except nobody is retiring...thus SWA/FO is still the SWA/FO

 

[YourPilotFriend]

Herbs worth every penny he made and should have been paid more, Gary too! Show me another airline CEO/Board member thats been at the helm for as long as Herb has and hasnt rapped the company blind with all the golden parachutes.

The reason Herb and Gary are still around is because they enjoy there job and have fun at it! Plus there both Texans and its called professional pride for there company!

Exactly...So why does everyone go around saying they are the lowest paid to make other airlines look bad, when clearly they are the highest paid and deserve it? I don't understand?

 

[Quimby]

Exactly...So why does everyone go around saying they are the lowest paid to make other airlines look bad, when clearly they are the highest paid and deserve it? I don't understand?

Herb basically built the company up from 1971. If you don't think he doesn't deserve what he's reaped from it, well......everyone has an opinion. Name another exec that been with an airline for 37 yrs these days. Let me know when you find one.

I'd say SWA got a bargain out of what HK built the company into.

Bill Gates is worth what, 50 billion? Is he overpaid? HK made peanuts compared to him.

 

[Jim Smyth]

except nobody is retiring...thus SWA/FO is still the SWA/FO

They will still continue to retire but not at the same rate as before. In 5 years (most likely 2-3) it will pick up again and then it will seem like a mute point. When you get to age 60 you can make your own mind up at that point to see if you will stay or go early. Nice choice to have. Until then you have the second best job in the company.

 

[momalley81]

So why does Gary Kelly stay at SW when he can come over to any other airline and make ten times as much and not even have to work for it??? Is he stupid??

See how east it is to look up information on the internet? Plus, it is so much more accurate than the people you obviously listen to.

I don't know what Gary Kelly's motivations are. I haven't asked him.

However, I do know that he has worked for SWA since the 80's and LUV's the airline. He makes a VERY comfortable living and actually cares about it and the people who work for it.

You asked me to prove my statement which I did.
Like 328dude said "Nice back pedaling."

 

[YourPilotFriend]

See how east it is to look up information on the internet? Plus, it is so much more accurate than the people you obviously listen to.

I don't know what Gary Kelly's motivations are. I haven't asked him.

However, I do know that he has worked for SWA since the 80's and LUV's the airline. He makes a VERY comfortable living and actually cares about it and the people who work for it.

You asked me to prove my statement which I did.
Like 328dude said "Nice back pedaling."

The CEO of AMR made $10 million + off AMR. Herb has made $200 million +. You didn't prove anything, you just picked a year where someone received stock options to add to their yearly salary. Warren Buffet only makes $100K a year from his salary at Berkshire. I guess you're worth more than him since you make more per year at SW.

 

[Whataburger]

Arpey could not run a local Starbucks in the Black. Herb created the most profitable airline in history. Herb should have made $400,000,000. He definetly got the short end of the stick. 35 years of continued profitability deserves more compensation that most white collar jokers.