Southwest and Frontier?

[climb2slow]

Why are we in Chp 11? Well, to say that Southwest didn't play a part in that is being ignorant. To say that they are the only reason, would be equally ingorant. We had years of mis-management like most airlines along with the competition and having Southwest in Denver really just accelerated things. Personally I think that SWA had hoped that Frontier would be long gone by now, and they could have a much larger and more lucrative foothold in Denver than they do now. We are still an inexpensive operation, and I am sure that it would be a quick sale.

 

[starchkr]

This will come across as an a$$hole...but then why are you bankrupt?

I understand where you are coming from, but again, people must read that i also put, "to the extent they thought they could." into my statement. Sure they/you have had a hand in that process, but so did 140 oil and a small processer called first data. But in no way was SWA the sole reason we had to file. Our costs are still very low as compared to the industry, and we have made an operating profit the last three months, something only a VERY small group of airlines can say. So i would say we are pretty strong for a company many (especially on FI) had written off last summer.

 

[sshrae]

I think the question is how long will southwest continue to operate at a loss in Den. I don't think its any secret that while southwest is losing money in that market f9 is actually posting a profit (minus the bankruptcy court fees). Maybe the new attitude over there is that they can't beat frontier in their market why not just take them over. They seem to have the capital to do so.

 

[Quimby]

I think the question is how long will southwest continue to operate at a loss in Den. I don't think its any secret that while southwest is losing money in that market f9 is actually posting a profit (minus the bankruptcy court fees). Maybe the new attitude over there is that they can't beat frontier in their market why not just take them over. They seem to have the capital to do so.

How do you know SWA is losing money in DEN?

 

[Whataburger]

I think the question is how long will southwest continue to operate at a loss in Den. I don't think its any secret that while southwest is losing money in that market f9 is actually posting a profit (minus the bankruptcy court fees). Maybe the new attitude over there is that they can't beat frontier in their market why not just take them over. They seem to have the capital to do so.

So, Frontier is making money except for its expenses? Ok.

I think all of us are making money except for our expenses.

 

[sshrae]

F9 posted an operating profit last quarter. That doesn't mean a lot though because of how much money you spend while in bankruptcy on court fees, lawyers, etc. SWA is not making money in DEN. Loads out of there are not good, and it is a very expensive market. By that rational I say SWA is not making money in DEN.

 

[Quimby]

F9 posted an operating profit last quarter. That doesn't mean a lot though because of how much money you spend while in bankruptcy on court fees, lawyers, etc. SWA is not making money in DEN. Loads out of there are not good, and it is a very expensive market. By that rational I say SWA is not making money in DEN.

You sound pretty sure of yourself. Have you been by the SWA gates in DEN?

 

[sshrae]

yup, 2 days ago, flight to SAN was wide open and f9 was oversold. This is not a swa bashing session. I like flying swa I'm just saying that f9 is not going anywhere anytime soon and it seems like this rumor could make sense.

 

[sshrae]

Not to mention they could get f9 for fire sale price. The stock is worth almost nothing while the company still has value.

 

[Quimby]

yup, 2 days ago, flight to SAN was wide open and f9 was oversold. This is not a swa bashing session. I like flying swa I'm just saying that f9 is not going anywhere anytime soon and it seems like this rumor could make sense.

I'm not saying you're bashing, but just questioning your theory.

 

[firstthird]

1 - it is questionable how much 'value' a company has if the 'stock is worth almost nothing'

2 - SWA made money in the first quarter operationally, 31 million. we had to pay 51 million in bad fuel hedging. what goes around comes around and we are now paying the price for bad bets on oil last summer.

3 - no one outside of SWA financial people really know what markets are making or not making money.

it is a tough time all around.

 

[Zinger]

SWA seems to be doing fine in Denver. ​

Here's a quote from the SWA CEO, Gary Kelly.​

"We’ve proven that with attractive destinations we can be very successful in a place like Denver. In fact, it’s been our most successful startup ever,
where we’ve grown to offer 118 daily nonstop flights to 32 destinations in a just a little more than three years."​

--"The most successful startup ever" is tough to spin to the contrary. ​

 

[sshrae]

1 - it is questionable how much 'value' a company has if the 'stock is worth almost nothing'

2 - SWA made money in the first quarter operationally, 31 million. we had to pay 51 million in bad fuel hedging. what goes around comes around and we are now paying the price for bad bets on oil last summer.

3 - no one outside of SWA financial people really know what markets are making or not making money.

it is a tough time all around.

Ever heard of 'value' investing? There is a good book out there called 'Intelligent Investor' by Ben Graham you should pick up. He was Warren Buffets mentor. You could probably learn a lot from it. cheers.

 

[tzskipper]

1 - it is questionable how much 'value' a company has if the 'stock is worth almost nothing'

2 - SWA made money in the first quarter operationally, 31 million. we had to pay 51 million in bad fuel hedging. what goes around comes around and we are now paying the price for bad bets on oil last summer.

3 - no one outside of SWA financial people really know what markets are making or not making money.

it is a tough time all around.

Fwiw, LUV lost $50 million "operationally" in the first quarter...

http://yahoo.brand.edgar-online.com...0833-14300&type=sect&dcn=0000092380-09-000016

Skipper

 

[firstthird]

Excluding special items, operating income was $31
million in first quarter 2009 compared to $99 million for the same period last year.

that is out of a news release from investors relations. talks about all the ins and outs. non-gaap we lost 20 million, gaap we lost 91 million.

but, flying airplanes, we made 31 million.

 

[tzskipper]

that is out of a news release from investors relations. talks about all the ins and outs. non-gaap we lost 20 million, gaap we lost 91 million.

but, flying airplanes, we made 31 million.

How do you explain the $50m operating loss shown in the Q1 10Q filing (looking at the income statement)? I apologize if I am wrong, but the SEC filing (see the link in the previous post) looks pretty straight forward regarding this issue...

Skipper

 

[GuppyWN]

The joys of funny math. Just shows you that you can do just about anything you want with the numbers.

Gup

 

[Daddy]

The "buy" is just a tactic to get yet another group of stupid pilots to agree to yet another crappy contract

 

[Daddy]

Incidentally, I am hearing that F9 has sold back and leased the last of their Airbi...anyone have confirmation on that? Is the end near? I do not see SWA buying F9, but getting gates and assets is definitely possible...anyone?

 

[StaySeated]

I hear a lot of negative things about SWA from some of my fellow F9 pilots, but I just don't understand how anyone can wish "ill will" towards another pilot group. When was the last time a SWA exec or a F9 "leader" walked into a pilot crew room and asked us what city we should serve, or where we should focus our marketing (that is easy at F9, because we don't advertise).

Anyway, that is my little disclaimer before I comment on SWA 1st quarter. SEC filing is pretty clear, if you don't want to read numbers I copied and pasted the following from the SWA website.

"DALLAS, April 16 /PRNewswire-FirstCall/ -- Southwest Airlines (NYSE: LUV) today reported a first quarter 2009 net loss of $91 million, or $.12 loss per diluted share, compared to net income of $34 million, or $.05 per diluted share, for first quarter 2008. First quarter 2009 results included special charges totaling $71 million (net), relating to non-cash, mark-to-market and other items associated with a portion of the Company's fuel hedge portfolio. Refer to the reconciliation in the accompanying tables for further information regarding special items. Excluding special items, first quarter 2009 net loss was $20 million, or $.03 loss per diluted share, compared to net income of $43 million, or $.06 per diluted share, in first quarter 2008. The first quarter 2009 results, excluding special items, of $.03 loss per diluted share compares to Thomson's First Call mean estimate of $.01 loss per diluted share. Operating loss for first quarter 2009 was $50 million compared to operating income of $88 million in first quarter 2008. Excluding special items, operating income was $31 million in first quarter 2009 compared to $99 million for the same period last year."

The difference between the $50 Million operating loss and the $31 Million operating is an $81 Million Hedge payment that can be found in the Reconciliation of the Impact of Fuel Contracts.

If you read furthur down you will find that SWA has a current liability of $950 Million in bad fuel hedges between today and 2013. That liability goes down as the price of fuel increases.

So, operating income was a positive $31 Million, but the $81 Million dollar hedge payment brought the number to negative $50 Million.

There is a lot more in the report, specifically about the concern of unrestricted cash as a percentage of earnings. SWA has begun to collatoralize aircraft in an effort to free up some cash, maybe there is more in common with F9 then we thought!