Southwest Line on Credit?

[HowardBorden]

Yeah, let's start with Richard Anderson.

Do you mean the Richard Anderson that presided over Northwest while they racked up losses of more than $2 billion and cut more than 14,000 jobs, that Richard Anderson?

 

[redflyer65]

I just think that it's fair that if your airline gets bought, you should keep your seat and
base. Why is that too much to ask?

Agreed. See Agreement #1 that the MEC blew a hole in.

PCL comes on here and says you never would have seen the pay with Agreement 1, or the fences, or the whatever. Complete BS. Gary would have followed through on all of it.

Richard Anderson?

I think he's doing a fine job at Delta. At Northwest? Not so much. Remember he bailed for UHC right before they filed for bankruptcy.

Isn't Delta the same carrier that was run thru bankruptcy and came out the other side with a very, very large pension obligation. So 40 years of profitablity at Delta? Try again.

 

[Muskycat]

Gary Kelly became CEO of SWA in July 2004. If an investor would have made a $100K investment in all 4 of the big 4, LUV, AMR, DAL, and UAL in July 2004, here is what that investment would approximately be worth today:

AMR: $0
DAL: $0
UAL: $0
LUV: $90K

While SWA margins are not as high as they were 10 or 20 years ago, their 40 years of consecutive profits and history of being financially conservative has created a balance sheet that the Big 3 will not have anytime soon. A strong balance sheet is one of the biggest factors in pilot job security during economic downturns or energy price spikes.

Why would anyone buy a bankrupt stock in 2004, UAL and DAL??? Pretty much guaranteed to be worthless when the new stock is issued emerging from bankruptcy. AMR was not foreseeably off from bankruptcy at the time either.

Poor analogy, try again.

 

[redflyer65]

Here you go.

Jan. 1995 to current...

AMR - 0
DAL - 0
UAL - 0
LUV - 341%


If you go back to 1990 timeframe, the numbers get even more insane.

Southwest has kept a strong balance sheet through all the years. The others weren't even close.

Any other airline still run a newhire class on Sept. 12, 2001? Need I say more?

 

[waveflyer]

.

Any other airline still run a newhire class on Sept. 12, 2001? Need I say more?

And ultimately,THIS ^^^ is the deal.

SWA didn't furlough in '08-09 when the economy was melting down and every other major did furlough- many times right after they'd just been recalled after lengthy furloughs-

AT pilots, At some point, you will NEED SWA. Life will happen. Sickness. Cancer. Death. Accidents. Injury. Divorce. And the southwest FAMILY will be there for you.
And if you never share it, I hope you let yourself cry in your Cheerios over the words you've said about southwest when those days come.

At some point, what this culture is, will click.

 

[slaquer5]

Here you go.

Jan. 1995 to current...

AMR - 0
DAL - 0
UAL - 0
LUV - 341%


If you go back to 1990 timeframe, the numbers get even more insane.

I do not think they want the facts.

 

[PCL_128]

Gary Kelly became CEO of SWA in July 2004. If an investor would have made a $100K investment in all 4 of the big 4, LUV, AMR, DAL, and UAL in July 2004, here is what that investment would approximately be worth today:

AMR: $0
DAL: $0
UAL: $0
LUV: $90K

While SWA margins are not as high as they were 10 or 20 years ago, their 40 years of consecutive profits and history of being financially conservative has created a balance sheet that the Big 3 will not have anytime soon. A strong balance sheet is one of the biggest factors in pilot job security during economic downturns or energy price spikes.

You're comparing apples to coconuts, of course, because the CEOs of those carriers today are not the CEOs of those carriers then. By going back to 2004, you can measure Gary's effectiveness, or lack thereof, but not someone like Richard Anderson, because he wasn't running Delta at the time. We're talking about Gary and SWA's current performance and prospects compared to the other major carriers. And when doing that comparison, it's clear that Gary isn't stacking up very well.

 

[PCL_128]

Do you mean the Richard Anderson that presided over Northwest while they racked up losses of more than $2 billion and cut more than 14,000 jobs, that Richard Anderson?

Yes, that Richard Anderson. The one who bailed out for UHC because he didn't feel that bankruptcy was the right move. The one who managed the most effective merger in airline history. The one who presides over great margins, ROE, ROA, etc. The one who is kicking SWA's ass in Atlanta. That Richard Anderson.

You can "luv" your airline without feeling the need to defend the poor performance of your CEO. He's not your best buddy, you know.

 

[waveflyer]

PCL,
I won't argue bc I know your posts aren't so much true opinions, just you working the same tired angle you've been working since the beginning.
Bc you know about the restructuring going on here- you know about the 5 initiatives that are carrying us toward 15% ROIC w/o paycuts-
A truly objective person w/ knowledge of these projects would measure his success by progress made on these, and then financials after 2015 when all are scheduled to be complete-

But we know you're pretty much just about poisoning the well at this point

 

[PCL_128]

No, wave, I just don't believe that any of that is going to lead to 15% ROIC. You know what would? Ancillary fees. Gary is leaving tons of money on the table by not charging for bags. And it's costing shareholders a lot of money. I finally sold all of my shares a couple of weeks ago because I was tired of sitting around and waiting for someone to wake up and care about shareholder value.

 

[waveflyer]

Ok- come 18 months from now if GK's very publicly stated goal has not been reached, critique away.
In the meantime, please realize that as common as the armchair CEO is in our flying business, you truly are not as smart as you think you are

 

[PCL_128]

Ok- come 18 months from now if GK's very publicly stated goal has not been reached, critique away.

I like how you just ignore the fact that he hasn't generated shareholder value for years. All will be ok in 18 months! Riiiiiight.

 

[Ty Webb]

Any other airline still run a newhire class on Sept. 12, 2001?

Yep, AirTran. We had a class that started September 10, 2001 and continued to hire through 2008, tripling the number of pilots.

 

[waveflyer]

Not as good of a record during the 2009 economic crisis though eh Ty?

 

[texman]

PCL,

It is easy to make money when you come out of bankruptcy. You start with a clean slate.

 

[Cobraair75drvr]

Y'all have gone from a nimble rapidly growing company to one of us. Reality is your airline always had a large cost advantage. Up through the last 5-8 years it was labor(both in pay, benefits and productivity), then fuel costs. Now you don't and GK is trying to find some advantage over the rest of us. You always will be more efficient because of having one type, however you don't have the large advantage of yester year and that is a major problem. It will be interesting to watch. The days of rapid growth are over and my guess is GK has a limited time to get his objectives (from the board) accomplished and then he's toast. The new guy maybe from the outside and you will be the target. Every dog has his day, and yours may be behind. Only time will tell. Good luck.

PCL,

It is easy to make money when you come out of bankruptcy. You start with a clean slate.

 

[fam62c]

No, wave, I just don't believe that any of that is going to lead to 15% ROIC. You know what would? Ancillary fees. Gary is leaving tons of money on the table by not charging for bags. And it's costing shareholders a lot of money. I finally sold all of my shares a couple of weeks ago because I was tired of sitting around and waiting for someone to wake up and care about shareholder value.

If you are interested in shareholder value there are far better places to look than the airline industry. Airlines are capital investment and labor intensive as well as being highly economically sensitive. Airlines are forced to make huge capital commitments that go out many years while having almost no visibility where it comes to their number one cost item, fuel. When the economy gets a cold the airlines get pneumonia.

A Buffett/Graham value investing disciple like yourself would normally be putting their money almost anywhere else

 

[PCL_128]

If you are interested in shareholder value there are far better places to look than the airline industry. Airlines are capital investment and labor intensive as well as being highly economically sensitive. Airlines are forced to make huge capital commitments that go out many years while having almost no visibility where it comes to their number one cost item, fuel. When the economy gets a cold the airlines get pneumonia.

No disagreement there. The only airline I've ever owned stock in was AirTran, which converted to SWA shares after the merger. A lot of AirTran employees owned company stock because you got a 10% discount in the ESPP. Being a Graham/Buffett disciple, it's difficult for me to pass up a 10% return as soon as the purchase is made.

A Buffett/Graham value investing disciple like yourself would normally be putting their money almost anywhere else

I'm proud to say that I own no airline stock today! But, to be honest, I am looking at Copa and Allegiant. They do have some good value indicators right now. Just need some more time to research and watch them before I make a purchase.

 

[slaquer5]

I like how you just ignore the fact that he hasn't generated shareholder value for years. All will be ok in 18 months! Riiiiiight.

And the other airlines did?

I am guessing you shorted AMR,DAL, UAL.

Now that would be a true value. I grand slam.

 

[ATLplt]

Not as good of a record during the 2009 economic crisis though eh Ty?

In 2009 we made a record profit of $135 million dollars.