Interesting Article about SWA from Motley Fool....

[General Lee]

We make money there...............apparantly you don't.

Bye Bye dork.

You can have it. DL made $2.5 BILLION in ancillary revenues last year. SWA wasn't close. I heard you guys are instituting a program to find $5 in savings each day when you fly? Something Herb did awhile back and you are doing again? Is that right? I hope they don't go looking at your pay for savings? Hold on tight RED!

Here's the article from SFGATE.com Business:

Southwest seeks workers' ideas

Southwest Airlines, which has curbed fleet expansion on higher fuel prices, began asking employees this week to help it stay competitive by finding ways to save $5 a day.

The program repeats an initiative used by then-Chief Executive Officer Herb Kelleher in 2000, when the airline's fuel costs rose 63 percent.
Southwest will choose from among the best ideas later this year and implement them, CEO Gary Kelly told workers in a weekly recorded message.

Southwest is under growing pressure to trim spending as higher labor and fuel expenses erode its cost advantage over larger rivals.
The carrier has to keep its expenses lower than competitors to remain profitable while offering discount fares.

Southwest's cost advantage over so-called legacy carriers such as Delta Air Lines and UAL has fallen by half as those carriers restructured in bankruptcy. Southwest's fares also have moved closer to competitors', Kelly has said.



Bye Bye---General Lee

 

[General Lee]

I never thought of it that way Humvee, but you are exactly right. Just finished an article that spells out how domestic fare increases are driven by SW.

DL and others try to raise fares, if SW doesn't go along then the fare drops back immediately.

If SW raises fares, others follow along instantly.

Pretty serious domestic market force.

No Red, the problem is YOU GUYS ARE DRIVING THE FARE INCREASES. The others don't mind to match, but the others have other ways (fees) to make extra money. YOU DON'T. When you guys start the fare increases, everyone raises an eyebrow...... You must NEED the extra money..... Good luck RED.


Bye Bye---General Lee

 

[Whine Lover]

What's the alternative to no BK's... Closing the doors and flooding the market with more pilots. I'm thankful we have this option cause one day MAYBE we may need it too!!

Wow.


I feel the need to respond....but, suddenly find myself speechless at the thought of even trying to start a dialogue here....





Whine

 

[Whine Lover]

" What's interesting is that they (SWA) USED TO never go along with fare increases, because they had great hedges. ( and they controlled domestic pricing.) Now that they do not, and they have merger related costs, they HAVE TO have fare increases. ( and they still control domestic pricing.) Also, they don't charge for bags (more than two they do, and Airtran still does), so they miss out on a lot of ancillary revenue that the others (UAL made $5.2 BILLION last year in fees alone, DL $2.5 billion) make." ( and they are profitable , have minimal debt, and don't need to nickle and dime customers so that they can rob Peter to pay Paul. Oh, and they still control domestic pricing.)


LOL.

Apparently logic and debating skills are not your forte'. ?

However, I hear your international layover skills are Legend.

So, you have that going for you....which is good.





YKW

 

[humveedriver]

No Red, the problem is YOU GUYS ARE DRIVING THE FARE INCREASES. The others don't mind to match, but the others have other ways (fees) to make extra money. YOU DON'T. When you guys start the fare increases, everyone raises an eyebrow...... You must NEED the extra money..... Good luck RED.


Bye Bye---General Lee

http://www.usatoday.com/money/story/2012-08-20/Southwest-raises-fares-others-follow/57165136/1

No eyebrows being raised. Just airfare. SWA has a well developed cargo system that I think flies under the radar, and offsets the bags fly free situation. They are like the Uship of air cargo.

 

[fam62c]

It was $18 billion in 2008. Here is what the CEO said in the conference call yesterday via Seeking Alpha:

"Finally, we will hit our $7 billion debt reduction target to get to $10 billion in net debt. We generated $700 million of free cash flow this quarter and reduced our adjusted net debt to $13.8 billion. In 18 months, we've used our cash flow to reduce our net debt by over $3 billion and making modest but prudent investments in our fleet product facilities and technology."



So, in 18 months DL paid down $3 billion in debt. That is amazing. The total debt has been reduced by $7 billion, and by the end of the next year it should be down to $10 billion, and at that point the interest payments will be reduced by about $500 million PER YEAR. That is called a revenue generator, being able to post profits and pay down loads of debt at the same time.



Bye Bye---General Lee

Lots of free cash flow is the secret to carrying a lot of debt, that's why companies that have reliable free cash flow in good times and in bad like a Coke or a Proctor and Gamble for instance can get away with it if they need to. The airlines are the most cyclical industry there is and highly sensitive to the economy, a downturn that results in negative FCF can be a disaster for highly indebted companies. This is why in the 1990's we saw companies like UAL making 1B+ a year in profits in a good economy filing for bankruptcy a few years later when their liabilities overwhelmed them.

As long as DAL can continue as they are operating now with strong FCF to service/pay down the debt they will be fine. Unfortunately, what we find in the airline industry is that the good times tend to be short lived. Imagine what would happen if, say, Israel attacks Iran and the cost of fuel doubles causing all the airlines to have negative FCF? This is the problem with high debt in any industry but in particular the airline industry because of it's hyper-sensitivity to the economy and huge exposure to fuel cost risk.

Note for the General, this is not Delta bashing but rather an attempt to temper your optimism with some realism. UAL pilots in the late 1990's sounded just like you do now. DAL has a lot of debt....period. If they meet all of their debt reduction targets they will still have a lot of debt. If the current industry conditions continue they will be fine, if anything bad happens they will run out of options quickly. We've seen this cycle repeat over and over again in this industry.

 

[Whine Lover]

"....this is not Delta bashing but rather an attempt to temper your optimism with some realism. UAL pilots in the late 1990's sounded just like you do now. DAL has a lot of debt....period. If they meet all of their debt reduction targets they will still have a lot of debt. If the current industry conditions continue they will be fine, if anything bad happens they will run out of options quickly. We've seen this cycle repeat over and over again in this industry."

Exactly.


W

 

[General Lee]

Lots of free cash flow is the secret to carrying a lot of debt, that's why companies that have reliable free cash flow in good times and in bad like a Coke or a Proctor and Gamble for instance can get away with it if they need to. The airlines are the most cyclical industry there is and highly sensitive to the economy, a downturn that results in negative FCF can be a disaster for highly indebted companies. This is why in the 1990's we saw companies like UAL making 1B+ a year in profits in a good economy filing for bankruptcy a few years later when their liabilities overwhelmed them.

As long as DAL can continue as they are operating now with strong FCF to service/pay down the debt they will be fine. Unfortunately, what we find in the airline industry is that the good times tend to be short lived. Imagine what would happen if, say, Israel attacks Iran and the cost of fuel doubles causing all the airlines to have negative FCF? This is the problem with high debt in any industry but in particular the airline industry because of it's hyper-sensitivity to the economy and huge exposure to fuel cost risk.

Note for the General, this is not Delta bashing but rather an attempt to temper your optimism with some realism. UAL pilots in the late 1990's sounded just like you do now. DAL has a lot of debt....period. If they meet all of their debt reduction targets they will still have a lot of debt. If the current industry conditions continue they will be fine, if anything bad happens they will run out of options quickly. We've seen this cycle repeat over and over again in this industry.

Thanks fam for the tutorial. ( it was a good post) I don't think DL pilots are acting like the United pilots of the past at all. I think we finally feel we have competent management to get this thing back on track. Financially, there are always hurdles, like wars and oil spikes. It's great DL management thought outside the box to buy a refinery to try to combat the highest cost to the airline, fuel prices. If oil were to spike, I would think that DL would handle better than the others because of the forward thinking. Next, airlines didn't have the ability to charge fees a decade ago like they do now. Now, fees are almost accepted in normal travel. Charging an extra $20 for a seat with a few more inches room is common. That ancillary revenue generation will help all of the legacies pay down debt, something they couldn't do in the past. DL was paying down $2 billion in debt PER YEAR over the last few. That is great. Paying down the pension obligations will come from the same revenue stream most likely.

When it comes down to it, there will be a few legacies left producing Billions of dollars per year in revenue. Throw in a few profitable LCCs and a few large regionals supplying feed, and you have the future. Consolidation will facilitate this. Too big to fail will be another catchy term.



Bye Bye---General Lee

 

[madjack]

Rio, Paris, Anchorage, Narita. I like them all.


Enjoy!!

 

[General Lee]

Rio, Paris, Anchorage, Narita. I like them all.


Enjoy!!

I really do. Enjoy Corpus and Omaha!


Bye Bye---General Lee

 

[Whine Lover]

I've done them all...and to each their own.

I enjoy every city, no matter how distant or how close to home. Hell...I just spent 2 nights in Lincoln, Illinois..by personal choice, and enjoyed THAT.

I don't quantify or qualify destinations on this Planet by how "exotic" and "romantic" they might seem....I just ENJOY them for what they are.

Different.

As a matter of fact, I had two of my favorite layovers in Omaha...Once, ferrying a new aircraft from the Mooney factory in Texas, we layed over and I had one of the best steaks in my life.

Another time...I met a really cool Girl and we wound up doing shots and eating rose petals together ( I am not sure why. ) after Whitesnake checked into the same Hotel that evening. ( I had NO idea who they were, and I didn't care...But, "thanks" to whoever made up THAT one-hit-wonder band. (?) )

- Best pizza in a Hotel Bar? ..... EWR

- Insane nightlife?.... SJU

- Nicest folks I ever met?( took me on a free car tour of their town)..BWI

- Great beers? ... BRU

- Best architecture?...DBX

- Easiest/best laid-out airport in the World? ....MCI

- Cheap and abundant FUN?...HKG

- Buffalo Burgers?....DEN

- Hangin' on the beach w/scantily clad, drunk, new-hire F/A's...FLL

- BBQ? ....MCI / STL (Laclede's landing in STL folks...Many options.)

- Wings? ....BUF ( The Anchor Bar ORIGINALS. )


And on, and ON....

To denigrate any one layover city is ignorance of the facts of what they may have to offer, to place others above all else is self-serving and elitist.

Enjoy every moment you can, wherever you are, and savor the times and the people, and the things you get to experience.

Not many people have the luxury of experiencing all these people, places , and things as we do...





Whine

P.S. - How about "The Willows" in PHL...Or, Fells Point in BWI...Or, ( come on G.L. ) "Spondivits" in ATL? THIS....is what I am Talkin' Bout. You don't need to go around the planet to find legendary fun...

 

[redflyer65]

To denigrate any one layover city is ignorance of the facts of what they may have to offer, to place others above all else is self-serving and elitist.






Whine

I'm glad you finally figured out the General's personality, in one simple line.

Excellent work!!!!

 

[Whine Lover]

Ha!

Had that pegged the first time I signed on here many years ago...

Good Luck to him and the rest of us....We live in a different World than most, and there's no telling why any of us do what we do.

Gay Smiley -

May we ALL somehow be Blessed and find some form of Salvation from the Aviation Gods who put Us here.


Whine

 

[Freebrd]

....and then Jenny sellsout and gives up bigger planes to DCI, and thinks we're impressed by where she lays over. OMA a good one, enjoy the Old Town area a lot, and Corpus a great layover, especially the Exec Surf Club bar!

 

[redflyer65]

Old Town is awesome. Of course Jenny Leigh has no idea.


She's got sundaes over the Atlantic!

 

[GIZMONC]

SWA need to start charging for bags. With the number of flights they have if they just chadrged $5.00 per bag that would generate 1.2 million in revenue per day. Multiply that by 365 and WOW. About $438 MILLION. That sure would add to profit. And that is just at $5.00 per bag.

 

[General Lee]

I've done them all...and to each their own.

I enjoy every city, no matter how distant or how close to home. Hell...I just spent 2 nights in Lincoln, Illinois..by personal choice, and enjoyed THAT.

I don't quantify or qualify destinations on this Planet by how "exotic" and "romantic" they might seem....I just ENJOY them for what they are.

Different.

As a matter of fact, I had two of my favorite layovers in Omaha...Once, ferrying a new aircraft from the Mooney factory in Texas, we layed over and I had one of the best steaks in my life.

Another time...I met a really cool Girl and we wound up doing shots and eating rose petals together ( I am not sure why. ) after Whitesnake checked into the same Hotel that evening. ( I had NO idea who they were, and I didn't care...But, "thanks" to whoever made up THAT one-hit-wonder band. (?) )

- Best pizza in a Hotel Bar? ..... EWR

- Insane nightlife?.... SJU

- Nicest folks I ever met?( took me on a free car tour of their town)..BWI

- Great beers? ... BRU

- Best architecture?...DBX

- Easiest/best laid-out airport in the World? ....MCI

- Cheap and abundant FUN?...HKG

- Buffalo Burgers?....DEN

- Hangin' on the beach w/scantily clad, drunk, new-hire F/A's...FLL

- BBQ? ....MCI / STL (Laclede's landing in STL folks...Many options.)

- Wings? ....BUF ( The Anchor Bar ORIGINALS. )


And on, and ON....

To denigrate any one layover city is ignorance of the facts of what they may have to offer, to place others above all else is self-serving and elitist.

Enjoy every moment you can, wherever you are, and savor the times and the people, and the things you get to experience.

Not many people have the luxury of experiencing all these people, places , and things as we do...





Whine

P.S. - How about "The Willows" in PHL...Or, Fells Point in BWI...Or, ( come on G.L. ) "Spondivits" in ATL? THIS....is what I am Talkin' Bout. You don't need to go around the planet to find legendary fun...

Thanks for your interesting commentary??? Anyway, Layovers are different at SWA because their business model is different. If we're talking layovers here, SWA and the legacies are polar opposites. LCCs lack variety. Your peace and love commentary is again interesting, but you can't make up for lack of variety in worldwide routes, and countries are just different. 5 legs a day to end up in Jackson can be done at either airline, but only one can do one leg to Munich or Rio. Good try whiny! It's called variety, you and Red can look it up.


Bye Bye----General Lee

 

[General Lee]

Old Town is awesome. Of course Jenny Leigh has no idea.


She's got sundaes over the Atlantic!

And you've got quesadillas at the MAF hotel bar. Good for you loser!



Bye Bye---General Lee

 

[General Lee]

SWA need to start charging for bags. With the number of flights they have if they just chadrged $5.00 per bag that would generate 1.2 million in revenue per day. Multiply that by 365 and WOW. About $438 MILLION. That sure would add to profit. And that is just at $5.00 per bag.

Didn't you see their lame "People's Court" commercials? I recall the chubby Capt saying "oh, Southwest would NEVER do that....." (even though AT does). And they painted "free bags fly here" on some of their 737s.... Ha ha.



Bye Bye---General Lee

 

[Britpilot]

[QUOTE Your culture at SWA has been smashed by your merger, treating your fellow pilots like DIRT. That may never be repaired. Good luck!


Bye Bye---General Lee[/QUOTE]

Are you referring to posts on websites by anonymous children? The AT guys I have met flying the line or at the bar appear thrilled to be on the swa partition. Captains that have flown with ex-AT guys have all told me they are great guys, perform professionally, and are happy to be here. Please tell me you are not posting something as ridiculous as the above based on quotes from losers (on both sides) from FI.
When I fly through ATL, the AT pilots I meet in the terminal all smile and say hello. Not flipping me off telling me to go F myself.
I have personally never treated anyone like dirt, unless they had earned it.[/QUOTE]

It may be nice on the SWA side but let me tell you the AT side sucks.
We are going to be stuck with this crap for years, there will be resentment, there already is.