Gary Kelly Highlights from Bears & Sterns Brief

[lowecur]

Standing-by for the new city announcement...rumor of a sunny city...

ATL or CLT. GK will continue to prey on the weak.

 

[FlyBoeingJets]

It concerns me!

1) SWA is a highly flexible, financially stable, well oiled machine.

2)Their achilles heal is the rest of the LCC's are growing quicker than they are and the LCC's are "trending" higher load factors and are making money or they are close to it.

3) As the next few years go by, SWA will be dealing with a very formative coalition of airlines that will be overlapping many of their routes with head to head competition.

4) I don't count out SWA for one minute, but the cake walk is over.

I agree with #1.

I say no to #2. SWA is adding more aircraft than either JB or Airtran. But JB and Airtran are betting more on their growth as a percentage of current revenue. JB and Airtran are the airlines betting the farm on growth. SWA can better handle a mistep if the LCC growth phenomenon loses steam.

Load factor issues? We'll see. The high frequency model produces lower load factors. You are looking at a snap shot in time and load factors will eventually trend higher for SWA and lower for JB.

#3 is worrisome and will force some hard decisions if it gets that competitive for SWA.

Yes the cakewalk is over but it never really was a calkwalk until 03 to '04, was it??