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LUV Adjusts Fuel-Hedging Strategy

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Now you know as well as I do last year SWAPA was all up in arms about how we could be the subject of a leveraged buyout. The company has done this before. They get cash and increase their leverage. I suppose you were against this from the get go, I also believe you were the mastermind of our hedgeing program that has saved us millions of dollars. think I will nomnate you for the positon of SWA CEO the next time the board meets. You seem to be a verry angry man and for that i'm sorry but you need to relax.

You might want to go re-read the thread starting article.....the hedging mastermind hasnt done so well lately.
 
Southwest said its cash balance on Monday was $1.3 billion, compared with $2.4 billion in cash and cash equivalents on Sept. 30 and more than $4.6 billion on June 30. Including short-term investments, Southwest's Sept. 30 balance was over $3.4 billion and the June 30 balance was more than $5.8 billion.

Those seem like big numbers to me. The point is, SWA is no longer operating in a fuel hedge bubble anymore. Not wishing "ill will", I just want to see if LUV can make a buck on even ground. It helps everyone if they can (negotiations, pricing, etc...).
 
Now you know as well as I do last year SWAPA was all up in arms about how we could be the subject of a leveraged buyout. The company has done this before. They get cash and increase their leverage. I suppose you were against this from the get go, I also believe you were the mastermind of our hedgeing program that has saved us millions of dollars. think I will nomnate you for the positon of SWA CEO the next time the board meets. You seem to be a verry angry man and for that i'm sorry but you need to relax.

I try to not be an angry man. I just feel like my Koolaid drip is running low or maybe the rose colored glasses have come off. Don't know. Hope it is temporary but I most certainly don't LUV all things Southwest like I have in the past 10 years. The whole codeshare "trust me" line is my biggest problem. I just cannot condone Mr. Kelly farming out our futures.

As far as a leveraged buyout? Are you serious? Gary is the CEO. That makes him the target of my rant. The stock is trading at a TEN YEAR LOW. If you look at the other transportation stocks you'll find they have held up MUCH better than Southwest Airlines. Alaska, for example, is trading at a 52 week HIGH. Our cash on hand is down 4 billion dollars in the past year. Our market cap is down 50% from last year which makes us a much bigger target for the leveraged buyout - not smaller. Gary has screwed the pooch on that front - or maybe not. Depends on his plans.

Just the facts as I see them bro. Please tell me I'm wrong.

V/R,
Gup
 
target for the leveraged buyout

But who has the money or the inclination? You're safe.
 
Its amazing to me that people are still waiting for the demise of SWA. First the story, over the past so many years, was how SWA would be " welcomed back to the real world " when their hedges run out, now they are welcomed back because they are " losing their arse " on hedges. AA dude, and others: we're all just worker bees, and we all just happen to work for different airlines. Its not a question of my dad can beat up your dad........we're all being beat up by the man. But thats a different discussion all together.
Perhaps all the doom and gloom on SWA people need to realize that the " millions of dollars SWA is losing" are paper losses. Losses on the future value of their hedging portfolio. They are the same type of losses, mark to market accounting voodoo, which enabled AIG to show massive profits on their CDS accounts. Those were value of future profits......which were obviously BS.
SWA is not losing on hedged fuel like some carriers, who hedged at 145 a barrel. And as the article showed, they are able to dump out future hedges, which is not happening at a 1 for 1 basis. They lose a deposit, not the entire number. And I do believe the same article mentioned a 1.4 billion dollar " gain " because fuel is cheaper next year....for everyone.
So.....SWA's ability to keep making profits ( yes, even last quarter was a profit...they are paying profit sharing on it....not the mark to market number), will remain steady, aided by low fuel prices and fueled by smart management........so far.

Welcome back, either way.:beer:
 
I try to not be an angry man. I just feel like my Koolaid drip is running low or maybe the rose colored glasses have come off. Don't know. Hope it is temporary but I most certainly don't LUV all things Southwest like I have in the past 10 years. The whole codeshare "trust me" line is my biggest problem. I just cannot condone Mr. Kelly farming out our futures.

As far as a leveraged buyout? Are you serious? Gary is the CEO. That makes him the target of my rant. The stock is trading at a TEN YEAR LOW. If you look at the other transportation stocks you'll find they have held up MUCH better than Southwest Airlines. Alaska, for example, is trading at a 52 week HIGH. Our cash on hand is down 4 billion dollars in the past year. Our market cap is down 50% from last year which makes us a much bigger target for the leveraged buyout - not smaller. Gary has screwed the pooch on that front - or maybe not. Depends on his plans.

Just the facts as I see them bro. Please tell me I'm wrong.

V/R,
Gup

Couldn't agree more. Kelly is completely risk averse. Seemed like a great money guy, but not a visionary. The code share thing has really pissed me off. I am so f^#$ing tired of hearing how we can not go near international, but Volaris, a 19 plane 2 year old company, apparently can grow their fleet and start up Mex/US ops, but we, the largest domestic operator in the US, can't. Just doesn't add up. Oh, and thanks for buying back stock at $14 dollars a share and wasting all that money. Pretty frustrating right now.
 
Why can't SW fly International? No reason in the world. You guys could ramp it up and be in the game next week if you wanted to.

But it is soooo much cheaper to have foreign crews flying those routes. Enjoy your helping of whipsaw, boys, your fun has just begun. Feelin' the LUV?
 
Are you kidding? NWA was the most financially stable airline by far in the 80s. Posted profits from the mid 50s thru 89 I believe. Paid cash for aircraft(something even the great LUV can't do) Think about that. Well the beach boys(Checci & Wilson) use about 20-30 million of their own cash, then use NWAs cash hoard to buy control then immediatly start loading the company up with debt (releasing shareholder value) Don't think it can't happen at LUV. It can happen and if it does the looting will happen very fast. Then the next thing you will be hearing is LUV is inefficient, needs to address out of line labor cost etc.





But who has the money or the inclination? You're safe.
 
Hmmmmmm, sounds all too familiar. Selling aircraft, leasing them back. Stalled contract negotiations with pilots. Code shares. $million quarterly losses.
A legacy carrier, they are!

No...they are still a low cost carrier....just taking the footsteps of some legacy carriers.
 

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