Southwest's Fuel/Expense Picture + other "stuff"

[chase]

Current hedges as of the end of '04 were as follows:

Year % hedged Price

05 85 $26
06 65 $32
07 45 $31
08 30 $33
09 25 $35


Year Costs Cost per gallon % of Expenses
of

2000 $ 804 .79 17.4%
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2001 $ 771 .71 15.6%

2002 $ 762 .68 14.9%

2003 $ 830 .72 15.2%

2004 $ 1,000 .83 16.7%
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Southwest's average aircraft trip stage length in 2004 was 576 miles with an average duration of approximately 1.5 hours.
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Approximately 78 percent of the Company's Customers fly nonstop.
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Southwest has ten collective bargaining agreements covering approximately 81.2 percent of its Employees.
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Southwest operated a total of 417 Boeing 737 aircraft as of December 31, 2004, of which 88 and 7 were under operating and capital leases, respectively. The remaining 322 aircraft were owned.
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Year Firm Orders Options Purchase Rights

2005 34 -- --

2006 26 8 --

2007 25 9 20

2008 6 25 20
2009-2012 -- -- 177

Totals 91 42 217 = 400 airplanes added

1st -300s to retire in 08 is the rumor

One of a kind deal at Islip, smart move in saving money down the road & keeping costs low:
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Southwest has entered into a concession agreement with the Town of Islip, New York which gives the Company the right to construct, furnish, occupy, and maintain a new concourse at the airport. Once all phases of the project are completed, the concourse could have up to eight gates. Phase I of this project, which began operations in August 2004, includes four gates. The Company has announced plans to construct Phase II of the project, which includes an additional 4 gates. When all phases of construction are complete, the entire new concourse will become the property of the Town of Islip. In return for constructing the new concourse, Southwest will receive fixed-rent abatements for a total of 25 years; however, the Company will still be required to pay variable rents for common use areas and manage the new concourse.

KEY PLAYERS (NAMES YOU'D WANT TO BE FAMILIAR WITH)
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Name Position Age

Herbert D. Kelleher Chairman of the Board 73

Gary C. Kelly Vice Chairman of the Board and Chief Executive Officer 49

Colleen C. Barrett Director, President and Secretary 60

Donna D. Conover Executive Vice President -- Customer Operations 51

James C. Wimberly Executive Vice President -- Aircraft Operations 51

Laura Wright Senior Vice President -- Finance and Chief Financial Officer 44

Joyce C. Rogge Senior Vice President -- Marketing 47

HEADCOUNT...WAYS TO SAVE MONEY...FEWER FOLKS PER AIRPLANE
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The Company's headcount per aircraft decreased from 85 at December 31, 2003, to 74 at December 31, 2004.
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For fourth quarter 2004 versus 2003, salaries, wages, and benefits per ASM decreased 1.0 percent, as the Company benefited from increased labor productivity. This increase in productivity was driven primarily by headcount reductions from the Company's reservations center consolidation and early-out program during 2004, and slowed hiring. The Company expects to experience a decrease in salaries, wages, and benefits per ASM in first quarter 2005 due, in part, to severance and other charges related to the consolidation of the Company's reservations centers in first quarter 2004, along with increased productivity.

I'll post a separate more detailed thread explaining Southwest's fuel hedging policy for those interested to read & understand.​