SWA delaying new planes, adding used Westjet birds --article

[General Lee]

Southwest to save by delaying delivery of planes
Associated Press - 2 hrs ago


DALLAS (AP) -- Southwest Airlines Co. is delaying delivery of new airplanes and filling the gap with used planes to reduce spending over the next five years.
It's also raising its dividend and could soon buy back more of its own shares.
Southwest said Wednesday that it will delay 30 firm orders for Boeing 737 jets, which CEO Gary Kelly said would cut ca pital spending through 2018 by more than $500 million. The airline is also giving up or delaying options for additional planes.

Meanwhile Southwest will buy 10 used 737s from Canada's WestJet over the next two years. They average about 11 or 12 years old and should bide Southwest over until Boeing begins producing a new, more fuel-efficient 737 model called the Max late in this decade, Southwest officials said.

The airline isn't disclosing financial details of the Boeing and WestJet deals, which were announced at the Dallas company's annual meeting.

Southwest is raising the quarterly dividend due on June 26 to 4 cents per share, up from a penny per share. It's also boosting share-buyback authority to $1.5 billion from $1 billion. The company has bought $725 million in its own stock since August 2011.....




Good or bad for you guys? Used planes are popular these days, that's for sure! Hopefully the 10 Westjet birds will be growth for you guys, right? I think they may have Live TV installed already?



Bye Bye---General Lee

 

[OK3]

GL

Yes those airplanes are going to be used for our explosive growth in to LBB! We tried to get a crew base there but the company didn't want to take that overnight from us so we are just going to rapidly expand our presence there. It just gets better every day!

 

[redflyer65]

A very solid financial move.

They can buy 2 used planes for the cost of one new one. They are just stretching their legs toward the release of the Max.

Getting more 800's next year (switched the 700 to the 800) and released some options to buy used.

Adding another 500 million to a already working 1 Billion dollar share buyback to total 1.5 Billion.

Quadrupled the dividend. Brings the yeild up to 1%.

Agressive capital management. Exactly what the Board should be doing.

 

[FlyinGuy]

They are saving up some coin so get ready for the next purchase!!!

 

[Herkdrv]

Used to hear JB/SW marriage but recently its all been Alaska rumors. Any Eskimos hearing anything similar?

 

[Kharma Police]

Good news! Get planes from under the Artic ice for all I care. Nothing will soothe over bad feelings for everyone involved better than good solid growth.

 

[Mea25000]

I have not even heard a whisper of LUV of late. I got to be honest someone would have to pay 5.3 billion to get ALK right now... No one is going to pay that. That is half of LUV'S current market cap. How does anyone over at LUV think you guys are going to pull this off? Why would you want it..what a mess that would be. It would have to be a magic stock swap with the ALK board really wanting the deal. Something they swear they don't want. If you are buying I would bet blue

 

[Old School 737]

4.6B market cap... I think it would have happened when we were worth about 1.8b a few years ago..???

 

[Herkdrv]

Word on the street is merger not outright buyout.

 

[Hpilot]

4.6B market cap... I think it would have happened when we were worth about 1.8b a few years ago..???

Exactly, a few years ago before the stock took off and they had extra cash, people in the financial community couldn't believe Alaska wasn't getting purchased. No longer is that the case with the current price of the stock. Besides, Alaska is doing so well right now on it's own. Why screw up a good thing?

 

[kwick]

Word on the street is merger not outright buyout.

Like Airtran, right?

 

[Old School 737]

Hawaiian ??

 

[Jon Rivoli]

The minute you painted blurple over the eskimo, all of Alaskas loyal customers would boycott Southwest in protest. They would eventually get over it, but all of that good will would be gone.

 

[Phlintstone]

Good news! Get planes from under the Artic ice for all I care. Nothing will soothe over bad feelings for everyone involved better than good solid growth.

I haven't looked at the numbers but from my reading comprehension level it sounds like a continuing flat fleet vice growth. Anyone run the numbers to see the effect on the fleet?

I do agree it is a good move to get used -700s while dumping the -300s and begin planning for the -MAX.

Phred

 

[BILL LUMBERG]

You guys gonna staple Alaska too? Hiding behind GKs cape?

 

[Kharma Police]

I haven't looked at the numbers but from my reading comprehension level it sounds like a continuing flat fleet vice growth. Anyone run the numbers to see the effect on the fleet?

I do agree it is a good move to get used -700s while dumping the -300s and begin planning for the -MAX.

Phred

Yeah, you are right. I just read the email regarding flat growth.

 

[maxblast72]

I haven't looked at the numbers but from my reading comprehension level it sounds like a continuing flat fleet vice growth. Anyone run the numbers to see the effect on the fleet?

I do agree it is a good move to get used -700s while dumping the -300s and begin planning for the -MAX.

Phred

Original Fleet Modernization Plan:

2014: 24 B737-800s and 5 B737-700s
2015: 36 B737-700s

Revised Plan:

2014: 34 B737-800s
2015: 36 B737-700s
2014-2015: 10 Used B737-700s

Net result is 15 additional B737NGs coming through the end of 2015. The question remains how many of the 140 or so B737 Classics get retired by the end of 2015. Supposedly 88 B737 Classics are to get the Evolve interior last I heard. I would imagine there will be a SEC filing with the new delivery table filed over the next few days.

 

[GhettoBeechjet]

The 90 airframes coming basically replace the 88 717s leaving. Last I asked (both SWAPA and Mgt) SWA will be down to less than 100 classics by the end of 2015. Word is that these 50 ish airframes will be replaced by pre owned NGs. This gives them a lot of flexability to "right size" the fleet if they decide we have too much capacity after "agressive optimization"

 

[redflyer65]

Just my opinion, but I think we will see more of this maneuvering.

Especially purchasing or sub-leasing used 737-700's. Just the beginning.

 

[scoreboardII]

The minute you painted blurple over the eskimo, all of Alaskas loyal customers would boycott Southwest in protest. They would eventually get over it, but all of that good will would be gone.

all fifty of them?
The goodwill of a customer lasts until they can Internet click a cheaper or more convenient fare. Even Gary understands that fact.

 

[Ky.BrownBourbn]

all fifty of them?
The goodwill of a customer lasts until they can Internet click a cheaper or more convenient fare. Even Gary understands that fact.

DR chimes in in 3,2,1...

About the same thing about the Hawaiians and there brand loyalty. It all comes down to economics and they will always buy the cheapest ticket. PERIOD!

How many people live in ALASKA and How many people does Alaska fly per year? How many people fly TO and From Alaska yearly?

How many people live in Hawaii? How many people fly on Hawaiian every year? How many people fly to Hawaii every year?

I still think they both get Bought, Merged, Acquired, whatever you want to call it and it's not gonna matter what the 1.36 million Hawaiians, the 700
k Alaskans nor the employees think! It comes down to about 20 people. That's right, 20, the two Boards of Directors and that's it!

Good Luck, We all need it!
KBB

 

[fam62c]

I think the main point here is that SW isn't going to see any increases in the total number of aircraft for quite awhile, they are in replacement/realignment mode right now. It's going to be a very long journey up that seniority list for the folks near the bottom. A long time on reserve, a long time in undesirable bases, a long time working weekends and holidays and a very, very long time in the right seat of a 737. It's like a game of leapfrog, SW had their time and got way ahead now they will wait while some of the other carriers catch up and go past them.

Before long the Big-3 are going to be in high gear when it comes to hiring and promotion and SW will be hiring/upgrading few pilots. Part of the SW culture over the years came from fast growth and promotion, the airline went full-throttle for years and pilots hired at the right time had a great ride. Will the culture change (at least for the pilots) now that the music has stopped? I think there will be a lot of talk about cost at SW but very little talk about growth. SW should still be a good company and a good job but the rapid career progression is probably over for 15 years or so. All the CA's they will need for the next 20 years have already been hired.

 

[HowardBorden]

I think the main point here is that SW isn't going to see any increases in the total number of aircraft for quite awhile, they are in replacement/realignment mode right now. It's going to be a very long journey up that seniority list for the folks near the bottom. A long time on reserve, a long time in undesirable bases, a long time working weekends and holidays and a very, very long time in the right seat of a 737. It's like a game of leapfrog, SW had their time and got way ahead now they will wait while some of the other carriers catch up and go past them.

Before long the Big-3 are going to be in high gear when it comes to hiring and promotion and SW will be hiring/upgrading few pilots. Part of the SW culture over the years came from fast growth and promotion, the airline went full-throttle for years and pilots hired at the right time had a great ride. Will the culture change (at least for the pilots) now that the music has stopped? I think there will be a lot of talk about cost at SW but very little talk about growth. SW should still be a good company and a good job but the rapid career progression is probably over for 15 years or so. All the CA's they will need for the next 20 years have already been hired.

It all depends on international. If Hobby takes off with growth to South America and we start adding flights to the Caribbean from Houston and multiple other stations SWA will grow. The domestic markets are doing quite well and don't need international revenue to subsidize them in any way. Don't write them off just yet, this may just be a new beginning of growth, we will have to wait and see.

 

[johnsonrod]

When are you guys going to start serving Hawaii???? Is that in the long term plan? UAL/CAL, Alaska and Westjet use their 737NGs...........

 

[Kharma Police]

When are you guys going to start serving Hawaii???? Is that in the long term plan? UAL/CAL, Alaska and Westjet use their 737NGs...........

I don't think airlines can make much money going to market saturated Hawaii on a -700?

 

[General Lee]

I think the main point here is that SW isn't going to see any increases in the total number of aircraft for quite awhile, they are in replacement/realignment mode right now. It's going to be a very long journey up that seniority list for the folks near the bottom. A long time on reserve, a long time in undesirable bases, a long time working weekends and holidays and a very, very long time in the right seat of a 737. It's like a game of leapfrog, SW had their time and got way ahead now they will wait while some of the other carriers catch up and go past them.

Before long the Big-3 are going to be in high gear when it comes to hiring and promotion and SW will be hiring/upgrading few pilots. Part of the SW culture over the years came from fast growth and promotion, the airline went full-throttle for years and pilots hired at the right time had a great ride. Will the culture change (at least for the pilots) now that the music has stopped? I think there will be a lot of talk about cost at SW but very little talk about growth. SW should still be a good company and a good job but the rapid career progression is probably over for 15 years or so. All the CA's they will need for the next 20 years have already been hired.

Well stated. It's a swap of fortunes. SWA had a VERY GOOD last decade, and the legacies got nailed. It's about to turn around, at least hiring wise, in a couple years, and then it won't stop. Will that tempt bottom SWA guys to look at the hiring at all 3 legacies? Probably. When over 4000 pilots are scheduled to leave a carrier within 5 years (DL--2020-2024), that could mean insane upward movement, meaning better QOL and pay (not all planes on same payscale).


Bye Bye---General Lee

 

[DUBLINFLYER]

Why are there (20 to 24) new captain upgrade classes every month, I don't think they are upgrading just for the fun of it - stay tuned

 

[Just thinking]

Why are there (20 to 24) new captain upgrade classes every month, I don't think they are upgrading just for the fun of it - stay tuned

How else can they grab all the Captain seats before 1 January 2015...... it was promised by gary and he is coming through for SWAPA..... Next thing will be the work rule concessions that he will come after in negotiations as they continue. He scratched your back and now you will have to scratch his. He won't go after any sort of pay cut but the work rule changes will add to coveted 15% ROIC..... (something they have not achieved in over a decade.)

 

[canyonblue]

When over 4000 pilots are scheduled to leave a carrier within 5 years (DL--2020-2024), that could mean insane upward movement, meaning better QOL and pay (not all planes on same payscale).


Bye Bye---General Lee

Looks like Delta Connection is about to hire 3500 pilots in the not so distant future.

 

[scoreboardII]

How else can they grab all the Captain seats before 1 January 2015...... it was promised by gary and he is coming through for SWAPA..... Next thing will be the work rule concessions that he will come after in negotiations as they continue. He scratched your back and now you will have to scratch his. He won't go after any sort of pay cut but the work rule changes will add to coveted 15% ROIC..... (something they have not achieved in over a decade.)

justthinking is obviously not thinking.

This tired old "give back pay to make ROI" is false. We could give back 50% of our pay and only make ROI move a few percent. We are not going to give back 50% in pay or work rules. We are not going to give back anything as long as the other airlines pilots pay are rising above ours, and we continue to make money. 15% ROI be damned, FUPM.