Southwest = 4Q PROFIT

[SWA/FO]

86 million bucks...baby! :beer:
Southwest Airlines has added a news release to its Investor Relations website.
Title: Southwest Airlines Reports Fourth Quarter Earnings and 33rd Consecutive Year of Profitability
Date: 1/18/2006 6:45:00 AM
For a complete listing of our news releases, please click here

DALLAS, Jan. 18 /PRNewswire-FirstCall/ -- Southwest Airlines (NYSE: LUV)today reported its fourth quarter and full year 2005 results. Net income forfourth quarter 2005 was $86 million, or $.10 per diluted share, compared to$56 million, or $.07 per diluted share, for fourth quarter 2004. TheCompany's fourth quarter 2005 and 2004 results included unrealized losses,recorded in "Other gains/losses," associated with derivative instruments thatwill settle in future accounting periods recorded as a result of Statement ofFinancial Accounting Standard 133 (SFAS 133), "Accounting for DerivativeInstruments and Hedging Activities," as amended. Excluding SFAS 133 items infourth quarter 2005 and 2004, respectively, net income was $98 million, or$.12 per diluted share, compared to $68 million, or $.08 per diluted share.See the attached reconciliation for further information on these items. The Company's fourth quarter 2005 results included $24 million (beforeprofit sharing and income taxes) in additional 2005 federal airport securityexpenses due to a retroactive assessment by the Transportation SecurityAdministration (TSA) made, without notice or opportunity to protest, inJanuary 2006. This assessment was completely unexpected, and the Companybelieves it is improper and plans to vigorously contest it.

 

[pilot141]

FedEx Corp. reported the following consolidated results for the fourth quarter:

*Revenue of $7.72 billion, up 10% from $7.04 billion the previous year
*Operating income of $740 million, up 8% from $685 million a year ago
*Operating margin of 9.6%, down from 9.7% the previous year
*Net income of $448 million, up 9% from last year's $412 million


From here.

Shall we dispense with the e-penis brandishing from now on, or would you like to continue?

 

[SWA/FO]

FED EX = 4Q PROFIT

448 million.... baby! :beer:

Oh, I just read that last line in your post. Looks as if this started off as a "Southwest" thread. Not a "Fed Ex" thread. Just an observation. But if felt you needed to chime in then good on ya.

 

[RP 04]

FedEx Corp. reported the following consolidated results for the fourth quarter:

*Revenue of $7.72 billion, up 10% from $7.04 billion the previous year
*Operating income of $740 million, up 8% from $685 million a year ago
*Operating margin of 9.6%, down from 9.7% the previous year
*Net income of $448 million, up 9% from last year's $412 million


From here.

Shall we dispense with the e-penis brandishing from now on, or would you like to continue?

And also no hull loss in the fourth quarter, impressive!!!!

 

[Falcon Jet 1]

And also no hull loss in the fourth quarter, impressive!!!!__________________
And your point is. Last I checked SWA didnt have a hull loss either.

 

[canyonblue]

We can rebuild it, make it faster, stonger, na na na na...........

 

[labbats]

Congrats SWA, but what would your losses have been without the fuel hedges? Seems we're only getting 1/2 the story.

 

[canyonblue]

About a Gazillon dollars.

 

[Captain Overs]

Congrats SWA, but what would your losses have been without the fuel hedges? Seems we're only getting 1/2 the story.

Labbats, shut the F*** up. I'm so tired of hearing people bash SWA because they made money with a fuel hedge. Why do you think they got a good deal on fuel? Because they run a great airline with smart people. Why be a hater? Just because your shitty airline doesn't have the credit and pays full price for fuel shouldn't take away from an airline that does it right.

As far as the FedEx post up top, who cares? You can't compare a freight operation with a passenger airline. Apples and Oranges. Besides, I think FedEx needs all that money to replace the several airplanes they've put in the dirt the last few years.

Flame away. I know it's coming.

 

[SWA GUY]

Yes we made $$$ this quarter, and more than Q4 for the preceeding year. But if this Iran thing gets ugly we are all gonna get creamed.

 

[canyonblue737]

Congrats SWA, but what would your losses have been without the fuel hedges? Seems we're only getting 1/2 the story.

it wouldn't have been a loss. it is complex and clearly there would have been a quarter or two in the last few years with a loss but had SWA not hedged they would have changed their approach to ticket pricing, growth etc. and likely still eeked out a tiny profit. that is why you can't say hedging saved $100 mil and they had a profit of 85 mil so therefore it would have been a 15 mil loss.

clearly though fuel hedging is a major cause of the much higher level of profits SWA is showing.

 

[Falconjet]

Labbats, shut the F*** up. I'm so tired of hearing people bash SWA because they made money with a fuel hedge. Why do you think they got a good deal on fuel? Because they run a great airline with smart people. Why be a hater? Just because your shootty airline doesn't have the credit and pays full price for fuel shouldn't take away from an airline that does it right.

As far as the FedEx post up top, who cares? You can't compare a freight operation with a passenger airline. Apples and Oranges. Besides, I think FedEx needs all that money to replace the several airplanes they've put in the dirt the last few years.

Flame away. I know it's coming.

Overs: I was with you until you took the cheap shot at FedEx. So you just proved that you (and Labbats) may only have half a brain, instead of getting half the story. Bad juju to put stuff like that out there my man.

Good luck to you.

FJ

 

[pilot141]

Labbats, shut the F*** up. I'm so tired of hearing people bash SWA because they made money with a fuel hedge. Why do you think they got a good deal on fuel? Because they run a great airline with smart people. Why be a hater? Just because your shootty airline doesn't have the credit and pays full price for fuel shouldn't take away from an airline that does it right.

As far as the FedEx post up top, who cares? You can't compare a freight operation with a passenger airline. Apples and Oranges. Besides, I think FedEx needs all that money to replace the several airplanes they've put in the dirt the last few years.

Flame away. I know it's coming.

Yep, you need the flames coming your way junior.

For those of you paying attention, I was giving SWA/FO grief for bragging about his airline making money.

I've been around these boards a long time, and I've never seen anyone as boastful and gloating about his airline as SWA/FO.

My point is that continuous gloating about your success breeds not only contempt but outright hatred. Notice that in my response to SWA/FO I did nothing more than post some numbers from FedEx, only to be followed by posts referencing hull losses at FedEx.

Jealousy is a bitter pill to swallow.

I never said you guys cheated your way into the money or didn't deserve it. All I did was post some FedEx numbers.

Yet even this tangential challenge to your sensitive "King of the Hill" mentality elicits responses including such gems that we "need" the extra money to "replace the several airplanes we've put in the dirt."

Nice.


Is anyone feeling vulnerable these days?


If you want to reply with something intelligent, be my guest. But please no more of the "OMG U R bashing SWA U fag!!!!" You are wearing out the buttons on your cell phone.

 

[OffHot]

Hey labbats here is the other side of the story, our company hedges fuel and pays us a fair salary. EMB145 FO, yours does neither. I'll bet any major airline, EMB145 your not, would take a profit with hedging. Get over it. Jet Blue has good news-- oh they have a 5 year contract, United has good news--well they have a judge protecting them, it does get old. Bottom line on our income statement is the strongest in the industry and we made a profit (fedEx/UPS are Cargo, before your guys chime in). That of course is today, tomorrow-well we are working on that. This is of course the airline industry.

 

[7S3W7A]

Pilot141,

Ahhhhh, leave him alone. He's just the village idiot around here.

 

[Falconjet]

Sw

I kind of wish this had stayed a SW thread instead of getting mixed in with FedEx stuff, but I would like to say a couple of things about SW and their profitability over the years. I don't really have a dog in this fight except that I admire the company and think there are some things the other airlines could learn from them.

SW makes money for several reasons, but the primary reason is because they are run better than any other airline.

Their pay structure is ingenious. Trips for pay encourages pilots to work more in shorter time to maximize their productivity. If they block in early they have the guarantee, if they are delayed more than 10 mins (or whatever the number is) they do get paid the actual block. Paying second year for extra flying also increases the productivity of the pilots. Sure, everybody can work more to make more, but they have it ingrained in their culture. Very smart.

Reasonable and sustained growth. 8-10% per year. No more than they can do comfortably while maintaining service levels and profitability. Not trying to grab every bit of every market by dumping seats and pissing away money.

Single aircraft fleet. Again, ingenious. This is where I think jB is making its biggest mistake, but time will tell. SW minimizes training and maintenance costs and buys their aircraft with CASH. Mimimizes interest cost and profit destroying debt payments.

Oh yeah, those fuel hedges. As if they were the first company to think of hedging their energy costs. Right. Don't think Delta would be including the savings of their fuel hedges if they hadn't sold them? Don't think that your utility company doesn't purchase energy/fuel hedges? Think again. Any company with managers worth a dam would be hedging if they had the resources to do so. And that is what 30 years of profits will do for you, it puts money in the bank so you can manage it wisely to purchase things like new aircraft and fuel hedges.

SW actually provides its customers with a level of service that meets their needs. It might not be the level of service that EVERYBODY expects for their money, but SW meets the needs if THEIR customers. They do that with a high frequency, ON TIME service to the places that their customers need to go. They don't tie up their entire fleet over the arrival fixes in holding patterns all day long waiting to get into their one hub. Listen to the flights stacking up over Rome intersection at 9am on a clear blue day and you will know what I am talking about. They fly point to point and take people where they need to go quickly without uneccessary stops which waste time and money.

Internet ticketing. SW helped pioneer this, and you can sit right there and see just about every fare that might be charged for a given flight. No need to wonder if the person next to you paid less, you can see every fare and if you purchase early enough you will know that you paid the lowest fare. Simple and fair, which is all most people want. Again, ingenious.

Then there is the corporate mentality as well. They enjoy their jobs and they treat all their employees like family and with respect. It really is an amazing concept, you know treating your employees as an asset instead of a liability.

There are more things that I am obviously not aware of, but you can bet that they aren't sitting back on their laurels and counting their profits. They are out there trying to ensure future profits by continuing to improve their business plan. Good for them.

So to make the argument that SW wouldn't be profitable without fuel hedges is kind of like saying that FedEx wouldn't be profitable without the boxes. Its just a part of SW's business plan that every other airline ought to emulating if they only had the CASH to pull it off.

Ok, I'm glad I got that off my chest. Back to the nice friendly banter.

FJ

 

[flypdx]

"For those of you paying attention, I was giving SWA/FO grief for bragging about his airline making money."
"
I've been around these boards a long time, and I've never seen anyone as boastful and gloating about his airline as SWA/FO"

God forbid.

Are you all going insane?

 

[pilot141]

"For those of you paying attention, I was giving SWA/FO grief for bragging about his airline making money."
"
I've been around these boards a long time, and I've never seen anyone as boastful and gloating about his airline as SWA/FO"

God forbid.

Are you all going insane?

Let me add.....recently and with as much ill will toward other carriers.

 

[FDJ2]

We can rebuild it, make it faster, stonger, na na na na...........

What about the 6 year old?

 

[Falconjet]

More bad juju

What about the 6 year old?

More cheap shots. Nice.

 

[GogglesPisano]

Nice post Falconjet. That's a good take on SWA's success.

 

[OffHot]

Thanks Falconjet. FDJ2 get a life.

 

[GuppyWN]

I'll second what FO said...... YEAH BABY! Green money is a beautiful thing. Let's enjoy it while we can cause when the fuel hedges run out we're gonna be in worse shape than UAL or DAL or or or.

Gup

 

[Benhuntn]

I thought I would just add my two cents on fuel hedging. When SWA startedd it operated at a margin 15% below the majors (Fare Prices). Today they operate at about a 40% margin. In 2005 several majors raised fares, some as much as $100 bucks on a one-way ticket. I believe SWA raised prices in the area of $6 bucks across the board. Without fuel hedging we could raise our fares considrably and still compete and cover the cost of fuel. I read a financial article that said SWA raising fares $6 on every ticket would more than cover the fuel costs if hedging were gone. So when everyone thinks we can't make money without hedging it is a little misleading. We can if we have to raise fares, but that is not what we want to do. Just two cents to kinda kill this issue of hedging until the next post.

 

[FDJ2]

More cheap shots. Nice.

It's not a cheap shot. It's a tragedy. Nothing cheap about it. A 6 year old is dead, a moron makes light of the accident that killed him and you rush to his rescue. Why?

 

[FDJ2]

Thanks Falconjet. FDJ2 get a life.

I'm sure that 6 year old would have wanted to have one, but I guess you'd rather just ignore that painful reality and attack me. You're an idiot.

 

[canyonblue]

a moron makes light of the accident that killed him

Where was that? Someone asked about a hull loss and I replied that the plane is being repaired. Why did you even bother to open a thread titled "Southwest=4Q PROFIT" anyway. Your addition to this thread was moronic, and sick.

 

[USNFDX]

I thought I would just add my two cents on fuel hedging. When SWA startedd it operated at a margin 15% below the majors (Fare Prices). Today they operate at about a 40% margin. In 2005 several majors raised fares, some as much as $100 bucks on a one-way ticket. I believe SWA raised prices in the area of $6 bucks across the board. Without fuel hedging we could raise our fares considrably and still compete and cover the cost of fuel. I read a financial article that said SWA raising fares $6 on every ticket would more than cover the fuel costs if hedging were gone. So when everyone thinks we can't make money without hedging it is a little misleading. We can if we have to raise fares, but that is not what we want to do. Just two cents to kinda kill this issue of hedging until the next post.

According to pilotyip you can't raise fares:

"Raise the ticket process that’s a good one. USNFDX has the answer, lets raise ticket prices, it will have no effect upon load factors, because prices have nothing to do with load factors. Is that not SWA niche, prices no one can match and be profitable. So this way SWA dominates the market in that city pair and prevents competitors from getting into that market. So SWA will raise prices and take that chance in their market dominance to ensure their pilots don’t have to do anything they do not want to. SWA profits and pilot lifestyle are not interrelated at all, it is only that nasty ole management picking a new way to stick to labor? It that the new SW battle cry? "


SWA is not a non-profit organization. If they thought they could make more money by raising ticket prices they would. But they have some pretty smart people who know that it would hinder their growth.

 

[SWA/FO]

Let me add.....recently and with as much ill will toward other carriers.

Hey pilot141,

Let me add this, prove it! I had no part in your Fed Ex cheap shot that was offered above. I did notice, you like defending your company (Fed Ex) it sure looks as if I do the same thing with my Company. But when I do it its called boasting and bragging. Who invited you to this SOUTHWEST party anyway? Besides our 737 look better then any of yours :crying:

7S3W7A = everyones idiot

 

[CaptainMark]

86 million bucks...big deal...i think i hauled that much revenue on one leg from LA last week...