Fleet Nears 400 With 395th Addition
Southwest took delivery of a new Boeing 737-700 last week, bringing to ten the number of new aircraft we have added this year. We have 37 additional deliveries scheduled for the year.
When combined with our planned 737-200 retirements, this will put our fleet at 417 by yearend. Our fleet now consists of: 20 737-200s, 194 -300s, 25 -500s, and 156 -700s.
One additional 737-700 delivery is scheduled for April, with two slotted for May, and 19 scheduled for the summer months of June, July, and August
Southwest Airlines made $26 million in the first quarter of 2004, an 8.3% increase over the same period in 2003. Compare other airlines' financial performances by reading "Full Story."
First Quarter Financial Results -- Major Airlines
1Q 2004 1Q 2003 Change
Alaska ($42.7 mil) ($56.3 mil) +24.2%
America West 1.2 mil (62.0 mil) +101.9%
American (166.0 mil) (1.04 bil) +84.1%
Continental (124.0 mil) (221.0 mil) +43.9%
Delta (383.0 mil) (466.0 mil) +17.8%
JetBlue 15.2 mil 17.4 mil -12.6%
Northwest (223.0 mil) (396.0 mil) +43.6%
Southwest 26.0 mil 24.0 mil +8.3%
Profit sharing for '03 were just distributed to all 32,000+ employees. It is the 30th year of distribution (out of 32) with 8.03% being average for EVERY employee in the company. A total of $126,119.971 was distributed.
Some highlights from the webcast earlier this month:
(Italics are my thoughts only)
Currently capital spending is projected to decline over the next 2 yrs:
'04 $1.8 B '05 $1.5 B '06 $1.3 (...more money for profit? maybe
Regional capacity numbers:
'04 '03
13% 12% NE
15% 16% SE
17% 16% SW
16% 17% MW
39% 39% West
PHL - had largest increase in early bookings of any new city in SWA's history
Question asked about -300s purchased in "large numbers", i.e. from USAir...Kelly responded that the likelihood was small even though they have analog cockpits like SWs & that a large number of aircraft is more enticing than 5 or 10...however the desire is to purchase/lease only -700s
June comparisons in financials will be tougher to equate due to the elimination of additional securtiy taxes in June '03 raised yields temporarily across the board for everyone
April is very good for bookings, May & June will be harder but still look strong (standard setting of low expectations)
MX costs portion of ASM was .62% in 1Q04 vs .61%...increase wasn't due to -200s but due to -700 engine mx..performance is not satisfactory to SWA expectations....working with GE to fix the problem
Question asked the increase in pilot paying coming in Oct (12%+) & how it would impact ASM costs....Kelly's response was that the increase pay equaled to the money saved in closing the 3 res ctrs...in actual numbers the company is below 33,000 for employees for the first time in several years..1Q03 head count was 88 employees per airplane...now is around 80...with flat growth for the yr & all 29 airplanes added the number will decrease to around 78 by the end of the year according to my calculations
avg fuel cost for 1Q04 $.79.6 per gallon...for example Amerca West paid $1.02 ....earned $63M in fuel hedging for quarter...80% of '05 fuel is hedge at $25 a barrel ($24 was target price in '04)...30% hedge in '06 (when debt load is low & money is available fuel futures are an option....advantage to low debt ratio...currently around 38%...scary to look at other carriers so don't)....unit costs are declining for '04 according to Kelly
Productivity gains....already mentioned bodycount...no travel agency commissions this qtr...saved $10M....57% of revenue generated off website in 1Q04, 1Q03 was 50%....winglets have reduced fuel consumption on -700s by 3-4%, only 50 aircraft so far out of 156, all -700 fleet will be converted by Mar '05...Aug '04 planes coming from Boeing directly will be outfitted with winglets...(discussions I've heard about modifying some of the newer -300 fleet with projections fuel saving will be greater in these aircraft)
Repurchase of $125M in stock by company...largest gain in aircraft due in 2Q04 with 12 net gain aircraft (PHL opening...gotta have something to fly 24 flights a day by mid June) ...net of 8 in 3Q04, net of 4 in 4Q04...total of 29 for year...always looking for more -700s...ASM costs went from $.076 to $.078 per mile...expect a 10% growth factor in '05 (10% of 4400 pilots =440 + 150 for retirements/medicals = 600 pilots....a wild guess on my part so don't quit your day job yet!)
Lots of good news out there with more to come. Despite the first rejection letters being sent out, don't get discouraged, SWA will be looking for pilots for years to come assuming all things stay on track (who knows!!)....good luck to all carriers as it would appear as the flying public is coming back very strong....my flights have been exceptionally full since March & there is no let up...we can only hope & prayer.
Southwest took delivery of a new Boeing 737-700 last week, bringing to ten the number of new aircraft we have added this year. We have 37 additional deliveries scheduled for the year.
When combined with our planned 737-200 retirements, this will put our fleet at 417 by yearend. Our fleet now consists of: 20 737-200s, 194 -300s, 25 -500s, and 156 -700s.
One additional 737-700 delivery is scheduled for April, with two slotted for May, and 19 scheduled for the summer months of June, July, and August
Southwest Airlines made $26 million in the first quarter of 2004, an 8.3% increase over the same period in 2003. Compare other airlines' financial performances by reading "Full Story."
First Quarter Financial Results -- Major Airlines
1Q 2004 1Q 2003 Change
Alaska ($42.7 mil) ($56.3 mil) +24.2%
America West 1.2 mil (62.0 mil) +101.9%
American (166.0 mil) (1.04 bil) +84.1%
Continental (124.0 mil) (221.0 mil) +43.9%
Delta (383.0 mil) (466.0 mil) +17.8%
JetBlue 15.2 mil 17.4 mil -12.6%
Northwest (223.0 mil) (396.0 mil) +43.6%
Southwest 26.0 mil 24.0 mil +8.3%
Profit sharing for '03 were just distributed to all 32,000+ employees. It is the 30th year of distribution (out of 32) with 8.03% being average for EVERY employee in the company. A total of $126,119.971 was distributed.
Some highlights from the webcast earlier this month:
(Italics are my thoughts only)
Currently capital spending is projected to decline over the next 2 yrs:
'04 $1.8 B '05 $1.5 B '06 $1.3 (...more money for profit? maybe
Regional capacity numbers:
'04 '03
13% 12% NE
15% 16% SE
17% 16% SW
16% 17% MW
39% 39% West
PHL - had largest increase in early bookings of any new city in SWA's history
Question asked about -300s purchased in "large numbers", i.e. from USAir...Kelly responded that the likelihood was small even though they have analog cockpits like SWs & that a large number of aircraft is more enticing than 5 or 10...however the desire is to purchase/lease only -700s
June comparisons in financials will be tougher to equate due to the elimination of additional securtiy taxes in June '03 raised yields temporarily across the board for everyone
April is very good for bookings, May & June will be harder but still look strong (standard setting of low expectations)
MX costs portion of ASM was .62% in 1Q04 vs .61%...increase wasn't due to -200s but due to -700 engine mx..performance is not satisfactory to SWA expectations....working with GE to fix the problem
Question asked the increase in pilot paying coming in Oct (12%+) & how it would impact ASM costs....Kelly's response was that the increase pay equaled to the money saved in closing the 3 res ctrs...in actual numbers the company is below 33,000 for employees for the first time in several years..1Q03 head count was 88 employees per airplane...now is around 80...with flat growth for the yr & all 29 airplanes added the number will decrease to around 78 by the end of the year according to my calculations
avg fuel cost for 1Q04 $.79.6 per gallon...for example Amerca West paid $1.02 ....earned $63M in fuel hedging for quarter...80% of '05 fuel is hedge at $25 a barrel ($24 was target price in '04)...30% hedge in '06 (when debt load is low & money is available fuel futures are an option....advantage to low debt ratio...currently around 38%...scary to look at other carriers so don't)....unit costs are declining for '04 according to Kelly
Productivity gains....already mentioned bodycount...no travel agency commissions this qtr...saved $10M....57% of revenue generated off website in 1Q04, 1Q03 was 50%....winglets have reduced fuel consumption on -700s by 3-4%, only 50 aircraft so far out of 156, all -700 fleet will be converted by Mar '05...Aug '04 planes coming from Boeing directly will be outfitted with winglets...(discussions I've heard about modifying some of the newer -300 fleet with projections fuel saving will be greater in these aircraft)
Repurchase of $125M in stock by company...largest gain in aircraft due in 2Q04 with 12 net gain aircraft (PHL opening...gotta have something to fly 24 flights a day by mid June) ...net of 8 in 3Q04, net of 4 in 4Q04...total of 29 for year...always looking for more -700s...ASM costs went from $.076 to $.078 per mile...expect a 10% growth factor in '05 (10% of 4400 pilots =440 + 150 for retirements/medicals = 600 pilots....a wild guess on my part so don't quit your day job yet!)
Lots of good news out there with more to come. Despite the first rejection letters being sent out, don't get discouraged, SWA will be looking for pilots for years to come assuming all things stay on track (who knows!!)....good luck to all carriers as it would appear as the flying public is coming back very strong....my flights have been exceptionally full since March & there is no let up...we can only hope & prayer.
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