SWA Keeps Plugging along

[chase]

This is a partial list of projects that will allow SWA to continue to grow over the next few years. Things are still plodding along & SWA is fortunate to be getting some great new pilots in the doors right now. For those who are on the way to Dallas for class or soon to be, congrats...to those who are "continuing the process", hang in there, your wait will be over soon, for those who have been told please try again, hang in there & don't give up...continue to work on the things you have control over & please apply again at the earliest possible chance (1 year from interview date).

I don't have any other news to confirm or deny things posted on here, I just got back from 2 weeks in Montana, much needed & enjoyed vacation, will try to collect more intel over the next few weeks.

This memo is the most recent update of major projects around our system that are either recently completed or to be done in the next 60-90 days. Not all major cities will be shown since some projects’ completion dates occur beyond the next 90 days.



All Cities: Bag tag issuance at kiosks is now operational in 22 cities. Roll-out to the other cities will be completed by year-end as we move kiosks from the concourses to the ticket counters. This will happen as we begin issuance of connecting boarding passes.



BNA: We have started the project to expand our ticket counter, ATO, and bag make-up facility by swapping space with AA. The new ticket counter and make-up carrousel will be in by August and AA will be completely moved in September. (no change)



HOU: The Euro Café news, gift and food store and the Discover Houston shop have opened. Work on additional food locations is delayed while the City and Four Families work out who is responsible for some utility installations.



ISP: The four new gate construction is complete, leaving a few administrative items for resolution. The exact opening date is to be determined.



LAS: The airport is expanding the security checkpoints that serve the C and D concourses from 9 to 18 lanes with that work to be completed in July. The bus drop-off checkpoint will then be remodeled and expanded (from 2 to 8 lanes) by the end of the year.



MDW: The new terminal project has been completed. We will finish the rehab of a few B concourse gates by mid-July and have all 19 gates available at that time.





OAK: Work continues on the new Provo facility with completion expected by September. (no change).





PHL: Work continues on our permanent Provisioning facility with move-in expected in October. (no change).



SAN: Provo will be relocated from under the concourse to a separate facility nearby giving us more space at a lower cost. Work has slowed somewhat but we still expect to complete it in August. The new facility can be converted into a full-service Provo operation as flight activity warrants.



Other Major Projects: Work continues on major projects in BWI, MCI, PHX and TPA with new gates at each of those cities opening throughout 2005. More detail will be provided as we get closer to completion.

 

[Flycatcher99]

thanx chase...

Thanks for these updates, chase. Nice to know the improvements that are coming. I didn't get to meet you during newhire training down in DAL, so hopefully we'll see you online somewhere. Your updates always made the wait more bearable!

 

[Mr Hat]

Just out of curiosity, do you expect to see a base in PHL in the future (next 5 to 10 years). From what I understand you guys are really pushing PHL and the growth there coupled with the USair competition seems to resemble your move into BWI.

Still Updating but I don't have a 737 type, hopeful but not really expecting a call anytime soon unfortunatly. I think I would literally pass out due to overexcitement if the phone rang and it was Southwest. I am considering getting my 737 type however, I have either a strike fund for my airlines current negotiations or a 737 type (IE 10 grand) with a baby on the way I am a little nervous in blowing my strike fund without an offer. Once negotiations are over Im off to Higher Power.

 

[CRJammin]

Chase, or anyone...any idea on the date of the next decision board? I interviewed earlier this month and just curious (wonderful experience). Also...if one is lucky enough to get the continuing the process call, is that after the board has met or before going before the board? I though it was after, but want to verify. Thanks all.

Wanting to feel the LUV!

 

[chase]

I've heard two dates, 15 or 20 July...sorry, been gone for awhile but the results will be out 10 days to 2 weeks afterwards...good luck.

As for the continue the process call (formerly referred to "don't quite your day job call")...this occurs after the DB has met & were selected by them to continue in the process. What occurs after this?

A third party does a thorough background check (different than merely calling references) on you for legal, financial, etc. issues that may disqualify you from being finally offered a job. If you filled out the app properly & disclosed everything, this will be a non-event, otherwise this is where the last QC occurs to make sure somone who shouldn't be showing up in DAL gets through the process.

Hope that helps.

 

[CRJammin]

Yes, thanks for the insight.

 

[conman11]

20 July is the DB date.

 

[chase]

Pt 1

A couple of posts that should be encouraging to folks wishing to apply to Southwest.
http://www.thestreet.com/_yahoo/stocks/transportation/10171752.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
http://www.thestreet.com/_yahoo/sto...71752.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
Southwest Takes Off on Upgrade

By Eric Gillin
TheStreet.com Staff Reporter
7/16/2004 11:25 AM EDT
Southwest Airlines (LUV:NYSE - commentary - research) missed Wall Street guidance because of rising costs on Thursday and saw its CEO suddenly resign, bowing to the pressure of helming the low-cost carrier through the worst three-year period in the history of aviation.

On Friday, shares of the carrier rose 22 cents, or 1.5%, to $14.97 after Credit Suisse First Boston upgraded the company to outperform from neutral, while a number of other brokerages maintained their current estimates and said the second half of 2004 -- and beyond -- looks good for the airline.



CSFB analyst Jim Higgins told investors that Southwest's revenue momentum was "impressive" and boosted his earnings estimates for the rest of 2004 and 2005 above current Wall Street consensus. "The company's outlook is much better than we had modeled, suggesting to us that consensus estimates are too low," he said in his note. "The outlook for third quarter and fiscal 2004 ex-fuel unit costs to be about flat is much better than we had modeled." (CSFB does and seeks to do business with the companies covered in research reports.)

In Higgins' view, the secret to Southwest is that it's showing such impressive gains in revenue generated per available seat mile, or RASM. In the second quarter, Southwest's RASM jumped 13.3% year over year, which the analyst said was one of the best performances of the last decade. While costs may be a problem, with network carriers such as US Airways (UAIR:Nasdaq - commentary - research) posting losses and struggling, Southwest could see upside in the coming years.

Other analysts agreed, arguing that the cost issues that Southwest faces do not change the fundamental outlook. Morgan Stanley analyst William Greene reiterated his outperform rating on shares, telling investors that he was optimistic that cost issues were peaking and that the industry was on the cusp of landmark change. (Morgan Stanley does and seeks to do business with the companies covered in research reports.)



"The next 12 months will see more change in the industry than the past three years combined," said Greene, who added later, "We believe Southwest is in the strongest position to benefit from what we believe is an inevitable industry restructuring." Elsewhere, Citigroup Smith Barney analyst Daniel McKenzie maintained his earnings estimates on the company and told investors the company was "a fundamentally strong story over the long term," citing its fuel hedges, strong balance sheet and low costs. That said, McKenzie kept his neutral rating and said the company's shares were just below full valuation, citing tough competition. (Citigroup does and seeks to do business with the companies covered in research reports.)

As for the sudden departure of CEO Parker, analysts shook off the news, saying that the intense labor negations with flight attendants and three years of remaining profitable while the rest of the industry suffers had taken its toll on Parker. Given the fact that new CEO Gary Kelly has 16 years of experience at the company, Southwest's sudden management change will not affect operations.
"Since becoming CEO three years ago, Jim has successfully led Southwest through a very disruptive period," said Michael Linenberg, airline analyst at Merrill Lynch, in reaction. "The promotion of Gary Kelly and Laura Wright underscores the strength and depth of the Southwest 'bench' ... the transition is likely to be smooth and seamless."

 

[chase]

Pt 2

Pt 2
Southwest's Formula: Productivity Cubed
That's new CEO Gary Kelly's philosophy, especially in the wake of a bitter labor dispute that has upped the low-fare airline's overheads

[font=arial,helvetica,univers]Southwest Airlines' (LUV ) new CEO and Vice-Chairman Gary Kelly, might represent the "new generation" of leadership at the carrier, but the 49-year-old is an old hand at shaping the lowest unit costs and strongest balance sheet in the business. An 18-year company veteran who became CFO in 1989, Kelly has worked closely with Southwest's legendary Chairman Herb Kelleher and President Colleen Barrett to build the nation's sixth-largest airline -- and the undisputed low-fare leader.if (!window.adOb) document.write('');
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Kelly talked with BusinessWeek's Wendy Zellner on July 15 after the stunning news that he would immediately be stepping into the top job formerly held by the retiring Jim Parker (see BW Online, 7/16/04, "A Quick Switch of Pilots at Southwest"). Here are edited excerpts of that conversation:

Q: How will having Gary Kelly as CEO be any different form having Jim Parker or Herb Kelleher, for that matter, whom Parker replaced as CEO in June, 2001?
A: I don't know yet, but it's going to be different. I've got different skills and a different personality. There are things that I perhaps place more emphasis on than either one of those fellows.

Q: What areas will be top priorities?
A: My top priority is just our people. If this is a great place to work, we can attract great people.... The immediate thing with our people that we need to do is...get our costs under control. That's just a critical competitive weapon we've enjoyed all 33 years.

Q: Are you disappointed by your recent flight-attendant agreement? [The contract, expected to be ratified by the end of July, would give flight attendants an average 31% pay increase over the contract's six-year term.]
A: Disappointment is not the right word. The challenge will be to continue to reward our people with pay increases they have earned, but that we can afford.... What we have offered is literally as much as we can afford, and I'm comfortable with that. But we're going to have to find ways to fund these wage increases. If anything, fares are coming down, not going up.

Q: So how do you do that?
A: Productivity, productivity, productivity.

Q: The last executive I remember retiring so suddenly for "personal reasons" was Jeff Skilling at Enron. Now, I'm not implying that Southwest is an Enron (EONOQ ) in any way. But can you shed some more light on why Jim is leaving?
A: There's certainly nothing at Southwest Airlines that would cause our CEO to retire, nothing like that. Southwest Airlines is a great company and has a great future. So there are no surprises at Southwest. It has just been a tough three years [for Jim]. I can attest to that. Jim is in his late 50s, and his contract was up for renewal, so that milestone was upon him.

Q: Since Herb Kelleher had to step in to get the flight-attendant deal done, does that bode ill for the day when Southwest has to do without Herb?
A: Who knows what it would have been like if somebody other than Herb had stepped in to try to close the deal? Would just the change of personalities and relationships have been enough? Herb is a unique talent, there is no doubt about it. [But] we all know that Southwest Airlines is not just one person -- and never has been.
_____________

Official notification from flight ops that no new domicile within the next year, maybe late '05 or probably '06. Note the dollars saved in each of these bylines

New domicile on hold:

"....Not only can we continue to produce efficient schedules, we are able to save the Company a minimum of $1.5 – 2.0 million of capital expense required to open a Domicile for both InFlight and Flight Operations. We also save our Company the operational cost of running the Domicile for at least a year......"

The new scheduler optimizer for aircraft has been discussed in a previous thread. Here is the $$'s associated with putting thi program into effect.

"....The great news is that the upcoming October 31 schedule change will be the first schedule processed by our new Schedule Planning optimization tool, which I will explain in the next paragraph. From this first optimized schedule we are gaining 6 aircraft worth of redeployed flyingwhich is worth approximately $180 million in savings to our Company. We accomplished this by redeploying capacity from 88 weak markets to 46 markets with strong demand. The schedule entails improved market timing and provides operational efficiencies like higher utilization."...


______
Yes our CASM is over $.08 right now, we want that to come down. Add winglets, gate services (using ground pwr instead of APU at the gate), less JA events due to new pilot scheduling programming, and many other cost saving measures the company in conjuction with the pilots & their elected representatives (along with all employee groups) are working at keeping costs low. We want to have the lowest fares out there & still compensate our employees fairly. Naysayers will comment these are mutually exclusive....I would use this as evidence we hope to "continue" to prove them wrong.


One more thing, we go to 41 flights a day on Halloween (our favorite day at Southwest...come to the GO in Dallas sometime for an incredible event, believe me) out of PHL...from zero to 41 flight in 5 months, faster than any other base in the history of the company. Thanks Philly....we luv you man!!![/font]

 

[English]

20 July is the DB date.

Would this be the same DB for those that interviewed this week? Or is it in August?

 

[chase]

Aug 31 for folks who interview this month, 20 July is for June interviewees.

 

[USNFDX]

[font=arial,helvetica,univers]
...........The new scheduler optimizer for aircraft has been discussed in a previous thread..............

______
.................less JA events due to new pilot scheduling programming................


Optimizer = SODIMIZER


Watch out![/font]

 

[:-)]

[font=arial,helvetica,univers]
...........The new scheduler optimizer for aircraft has been discussed in a previous thread..............

______
.................less JA events due to new pilot scheduling programming................


Optimizer = SODIMIZER




Watch out![/font]

I'd much rather be sodomized by a computer than by a living breathing screw scheduler.

Calvin

 

[chase]

Optimizer of aircraft is different than a program that "optimizes" pilot/FA scheduling...in our case the improvements put more money in my pocket & less days of work...this benefits SWA since we can do more flying with the same number of pilots...lower costs..everyone wins...I'll take this poison over the other ones floating around in the industry, cheers

 

[USNFDX]

All I can say is is best of luck.....Hopefuly it will work for you guys...At Fedex, we call it the "Sodimizer". The SIG (schedule improvement group) and the Union are constantly fighting the company over it. It spits out some crazy things, in the name of efficiency trying to save a buck. It schedules things right up to the limit (duty, 8 in 24, etc), running crews ragged, and then when somthing goes wrong they wind up launching stanby aircraft, learing crews around to cover the freight.

I think it's great that you guys all work hard to cut cost and make SWA profitable. Fedex used to be that way. Things like the "optimizer" have changed our culture.

Be wary.....There will be no going back!

 

[English]

Aug 31 for folks who interview this month, 20 July is for June interviewees.

Thanks Chase!

 

[chase]

Glad to help.


I tried looking for where I posted this originally but can't so here is the correction. After looking through the 10K posting for Southwest 2Q'04 & crunching the numbers, the ratio of employees to airplanes at the end of the quarter was 77.5 employees per airplane, at the end of the same period last year it was 82.5...I beleive I had originally stated our numbers were just over 78 employees per airplane...we actually had 405 airplanes at the end versus 402 (which was what I thought).

We'll continue to work at moving folks around to the right jobs as SWA goes through a large effort to get folks to shortfalls in manning.

What is also interesting I believe is the discussion on other boards about the eagerness of some pilots to look at other ways to increase utilization, i.e. red eyes for example....it would shake things up for sure...there are many long haul routes we could clean up on by flying west to east & not impact the schedule...we'll see what happens....thinking outside the box is good...

 

[chase]

Pt 1

In speaking to a realiable aviation expert we talked about the dilemma aircraft and engine owners were in when it comes to dealing with airlines that are struggling. I stated it appeared the leasors were between a rock & a hard space when it comes to lowering lease payments to a struggling carrier for fear if they don't the carrier would go under & then return the airplanes with no leasor in sight, thereby losing money on their aircraft. Since most airplanes are "bundled" together as an "investment" tools for non-flying companies, these companies can be caught off guard by the various cycles airlines put investors through. The airlines are at an advantage since there are so many folks with fingers in the pie, so to speak, their failure to communicate & discuss what new leasing agreements are being made works to the troubled airline's advantage.


All of the above was debunked when he told me that in the past that was true. However, there has been a concerted effort now on the part of the various lessors to consolidate together & demand much more of troubled carriers in terms of payment options, managemnt changes to benefit the lessors or other issues involving their capital=airplanes/engines. The willingness to take something over nothing (from a bankrupt airline) is no longer the only option he said.

The various leasing groups have consolidated & are now being lead by an approved negotiator/lawyer who is using the power of all of these vendors to get more movement on the part of some carriers to respond to their demands for payment or else. The article below highlights the position of strength these lessors are operating under versus in years past, a position of weakness....the market place is a wonderful place!

Would these leasing companies come to SWA with a bundled package of aircraft to fill a void left by a carrier? 1 or 2, probably not, 30-35, maybe so...interesting possibilities

___________
Nothing but Friendly Skies for G.E.

[size=-1]By CLAUDIA H. DEUTSCH[/size]

Published: July 16, 2004


Correction Appended

It would seem that any company that lends to, sells to or rents to a United States airline would be running scared these days, what with sky-high fuel prices, continued terrorism alerts and potential bankruptcies beleaguering the customer base.

And a company that does all three - well, its executives ought to be chewing their fingernails past the cuticle lines.


So why do the people at General Electric seem so calm?
"Sure, we've had impairment of assets and receivables write-offs,'' said David L. Calhoun, president of GE Transportation, which includes the company's aircraft-engine business. "But there's no way that the plight of the United States carriers is going to determine our success or failure.''

Indeed, not only does G.E. appear to be weathering the upheavals, in many ways it stands to gain from them. Should one of the teetering older airlines collapse, G.E. could find itself repossessing exactly the sort of young, fuel-efficient narrow-body jets that healthy, growing low-fare carriers like Southwest and JetBlue are clamoring for.

On the surface, G.E.'s vulnerability to the industry's vicissitudes would seem to be huge. GE Commercial Aviation Services - known as Gecas - leases out more than 1,200 of its own aircraft, manages 300 leases for other owners and handles maintenance for many aircraft. GE Transportation makes engines for aircraft manufacturers whose sales - and thus, engine purchases - rise and fall with the fortunes of the airlines. It also relies heavily on sales of spare parts, which decline when planes fly fewer hours.

The economic downturn that began in March 2000, followed by the Sept. 11 terrorist attacks, combined to diminish drastically the sales of airplane tickets, and thus the need for planes. Overproduction by both Boeing and Airbus in the late 1990's and early 2000's made the resulting glut worse.

"We went through the perfect storm,'' said Henry A. Hubschman, president of Gecas. "It may not be over.''

Timothy M. Ghriskey, chief investment officer of the investment management group Solaris Asset Management, said, "There's a good chance that one or more major carriers won't survive, and that certainly can have a negative impact on G.E.'s business.''

So far, though, G.E. has been largely unscathed. Its finance unit, which includes Gecas, completed a huge deal with China Eastern Airlines in the second quarter and leased 15 new Airbus A320's to a start-up airline, Virgin America. Gecas has accelerated its program for converting old airplanes to cargo planes, which require little interior refurbishing.

Most telling, not one of Gecas's 1,200 planes was grounded in the quarter. Orders for aircraft engines were up sharply, and the company said it expected the engine unit's revenue this year to hit $12 billion, up from $10.97 billion in 2003 - the first year-over-year growth since 2001.

Its fleet is in good shape, too. In the hard times after the Sept. 11 attacks, many airlines raised cash by selling their youngest aircraft to G.E. and then leasing them back. On average, Gecas planes are just six years old, down from eight in 1998.

G.E. has also protected itself by limiting the amount it would lend on an aircraft to significantly less than its full market value.

Nor are airline bankruptcies a major threat to G.E. Though G.E. is a leading creditor to several of the most troubled carriers, including Air Canada, United and US Airways, some of that lending has been so-called debtor-in-possession financing during Chapter 11 reorganizations, putting G.E. at the head of the line for repayment. And it has begun to "cross collateralize" its loans - allowing it to take collateral from one loan in repayment of another to the same borrower.

G.E. advanced $1.4 billion to United after Sept. 11, yet Mr. Hubschman is untroubled. "We haven't lost a penny,'' he said, "and we aren't going to, even if United is liquidated.''

He insists that repossessed planes are easy to place. When Varig Airlines of Brazil ran into difficulties a few years ago, he said, G.E. took back almost 40 planes. It quickly re-leased most of them to airlines in China, Malaysia and elsewhere.

G.E. is not alone in its good fortune, of course. American International Group's International Lease Finance subsidiary, G.E.'s main plane leasing rival, has an even younger fleet, and its profits, which declined for a couple of years, ticked back up in the first quarter of 2004.

"Thanks to our fuel-efficient aircraft and the low interest rate environment,'' John L. Plueger, its president, said, "our earnings have been pretty remarkably preserved.''

Perhaps most important, it is only the old, heavily unionized airlines like United and US Airways that are reeling, and they are a small part of the customer base. Gecas has more than 200 customers in 63 countries; only 27 of them are based in the United States. Only 20 of International Lease Finance's 138 customers are in the United States or Canada.

"We can't even satisfy the demand from the Middle East and Asia for single-aisle, narrow-bodied, fuel-efficient planes,'' Mr. Hubschman said.

Mr. Plueger of International Lease Finance is similarly ebullient. "The Asia-Pacific region has really absorbed the younger planes that airline bankruptcies sent back into the market,'' he said.

The United States airline market is expanding, too. Low-cost airlines like JetBlue and Southwest have grown exponentially, and are constantly hungry for more narrow-body planes to fly.

 

[chase]

Pt 2

(cont)
Still, headwinds do continue to blow. The Internet enables passengers to shop for the lowest fares. Corporations are substituting videoconferences for plane trips, and management experts say that the days when executives routinely flew first class are gone. Another terrorist event involving airplanes could re-instill fear of flying in many people. And aircraft manufacturers could overproduce again.

"It's always a question mark, whether Boeing or Airbus will make too many planes to satisfy too few customers,'' Mr. Calhoun conceded.

Competition for engine orders and airplane leases remains intense. Pratt & Whitney is stepping up its research and development to better compete for orders for the next generation of regional jets, according to Mark Sullivan, a spokesman for the company. On the leasing front, Mr. Plueger's company is taking delivery of 100 new planes this year, and has 308 more on order through 2010.

Still, with its diversity and sheer size, G.E. seems best positioned to hedge its bets. That is the view emphasized by Mr. Ghriskey of Solaris Asset Management, which has been trading in and out of G.E.'s stock for years, buying when it lags the market and selling when it outperforms. (G.E. stock closed yesterday at $33.37, up 24 cents.)

"If one piece of G.E. goes through a period of weakness, it can't destroy the company,'' Mr. Ghriskey said. "The strength of aircraft engines and leasing remains pretty irrelevant to the overall picture that is G.E.''



Correction: July 17, 2004, Saturday

Because of an editing error, an article in Business Day yesterday about the effect of airline industry troubles on the General Electric Company attributed a comment erroneously to Henry A. Hubschman, president of GE Commercial Aviation Services. While he did refer to the last few years as "the perfect storm," it was the writer of the article who said, "It may not be over."

 

[kilroy]

SWA online resume

I just went to update my online resume; when I logged on I realized my past employment, job history and education was not there. So I updated it and resubmitted my resume. Does anyone know if this will hurt my chances for an interview?