Southwest's magic formula: low costs, low fares and high pay

[FlyBoeingJets]

I know you are going to take this the wrong way. I don't mean any disrespect by it, but here goes.

You are a bit on the naive side in my opinion.

Thanks for the friendly response. I very well may be naive. I'm glad you didn't take it the wrong way.

 

[SWAdude]

I'm glad you didn't take it the wrong way.

Me too.

 

[Jon Rivoli]

Then we will raise ticket prices. We have all the pricing power - we make money in this environment, we are gaining market share baby!.

If you could, you would. Sans the fuel hedges you lost money last year. They won't last forever. United is making money at $70 a barrel, you can't. Can you get any more productive, you are the very model of lean and mean right now. Unpleasant truths, don't take it out on me. Right now, Southwest is the place to be and it is a great company, but the writing is on the wall.

Have a nice day.

 

[Benhuntn]

United made money? better read the report again. They Lost money forthe 1stQTR.

 

[Benhuntn]

Saw a GK video yesterday at EPT, we actually made money for '05 without hedges. I believe that was the result of a whooping $ 6.00 fare raise in the summer.

 

[SWA/FO]

United is making money at $70 a barrel, you can't.

The point is WE HAVE FUEL HEDGES NOW - we can charge less for our product and make still make MONEY. United is not making money at 70 bucks a barrel!

Writting on the wall? What are you talking about. What does the writting say? Give me your official prediction? I'm dying to hear it!!! What are you smoking in SLC?

the SWA/FO

imp:

 

[SWA/FO]

Who said Captains think different than the average FO!!

Who said the SWA/FO was average! :beer:

 

[FlyBoeingJets]

United is making money at $70 a barrel, you can't. . .

What??? Check the link at the bottom. The profit is from accounting changes due to BK.


In the combined first quarter of 2006, the Company (United) reported an operating loss of $171 million, an improvement of $79 million, or 32%, as compared to the operating loss of $250 million reported in the first quarter of 2005.

The Company reported significant improvements in revenue performance year-over-year. Consolidated revenues increased by $550 million between periods, increasing by 14% between quarters. Strong revenue improvement was experienced by both mainline and regional express passenger operations between quarters.

Consolidated operating expenses increased by $471 million between quarters. Fuel expense growth (mainline and regional affiliates) accounted for $314 million of the total operating expense growth between years, due to significant increases in the cost of jet fuel. Salary and related costs increased $51 million, primarily due to stock-compensation expense recognized upon adoption of FAS 123R in the first quarter to account for the MEIP and DEIP plans approved upon exit from bankruptcy.

Non-operating expenses increased by $88 million, from $52 million in the first quarter of 2005 to $140 million in the first quarter of 2006. Interest expense accounted for $74 million of this increase. Interest cost on the Credit Facility in the first quarter of 2006 was higher than interest cost for the DIP Financing in the prior year, primarily due to a significantly higher outstanding principal balance between periods. The Company also recorded non-cash interest costs in the 2006 quarter associated with the amortization of various discounts which were recorded to adjust aircraft mortgage, operating and capital lease financings to fair value at the date of adoption of fresh-start reporting.
The Company recorded a net reorganization gain of $22.9 billion in the combined first quarter of 2006, which was driven by the discharge of over $24.6 billion of claims and liabilities that had been recognized during the three-year restructuring process which began in late 2002. Reorganization charges in the first quarter of 2005 were $768 million.
The Company ended the first quarter of 2006 with total cash, including restricted cash, of $4.5 billion. Operating cash flows during the combined first quarter of 2006 were $455 million, and total available cash was significantly increased by the replacement of the DIP Financing with the Credit Facility on February 2, 2006.

http://biz.yahoo.com/e/060510/uaua10-q.html

 

[Jon Rivoli]

Last year, Southwest paid the equivalent of $26 a barrel for 85 percent of its fuel, saving $900 million in jet fuel costs. Those savings are more than Southwest's operating profit in 2005.


It's great that you are all solidly behind you're company, good luck. Talk to me in two years.

 

[SWA/FO]

Why do you have a 737 type? You wanted to be here at one time? Just a question... lets talk again in 2 years.