RedDogC130
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SWA posts small profit
- Thread starter RedDogC130
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Tanker Clown
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CatfishVT9
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Here's the numbers
Southwest Airlines posts lower quarterly profit
Thu Apr 17, 2008 6:37am EDT
NEW YORK, April 17 (Reuters) - Southwest Airlines Co (LUV.N: Quote, Profile, Research) on Thursday posted lower first-quarter earnings as a weak U.S. economy and record fuel costs took their toll on the leading U.S. discount carrier.
Quarterly net profit for Southwest was $34 million, or 5 cents per share, down from $93 million, or 12 cents per share, in the same period last year. (Reporting by Mark McSherry; editing by Mark Porter)
Southwest Airlines posts lower quarterly profit
Thu Apr 17, 2008 6:37am EDT
NEW YORK, April 17 (Reuters) - Southwest Airlines Co (LUV.N: Quote, Profile, Research) on Thursday posted lower first-quarter earnings as a weak U.S. economy and record fuel costs took their toll on the leading U.S. discount carrier.
Quarterly net profit for Southwest was $34 million, or 5 cents per share, down from $93 million, or 12 cents per share, in the same period last year. (Reporting by Mark McSherry; editing by Mark Porter)
If you can make money while oil is at all time high than more power to you. Will you beat SWA keep dreaming!
Falcon Jet 1
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Hey Reddog you might want to change the title of this thread cuz the gains were actually more if you read the whole thang!
Gary said: “Considering the weak economy and soaring jet fuel prices, we are very pleased to report a 30 percent year-over-year increase in first quarter 2008 earnings, excluding special items. Our earnings growth resulted from record first quarter 2008 operating revenues of $2.53 billion, which increased a strong 15.1 percent from a year ago, or 8.2 percent on an available seat mile (ASM) basis. Benefiting from the Easter shift to March this year (versus April last year), this was the best quarterly performance since second quarter 2006. With our new revenue initiatives well underway, our load factor of 69.8 percent was a record first quarter performance, and our passenger yields per revenue passenger mile (RPM) were up 4.7 percent compared to first quarter 2007.
Gary said: “Considering the weak economy and soaring jet fuel prices, we are very pleased to report a 30 percent year-over-year increase in first quarter 2008 earnings, excluding special items. Our earnings growth resulted from record first quarter 2008 operating revenues of $2.53 billion, which increased a strong 15.1 percent from a year ago, or 8.2 percent on an available seat mile (ASM) basis. Benefiting from the Easter shift to March this year (versus April last year), this was the best quarterly performance since second quarter 2006. With our new revenue initiatives well underway, our load factor of 69.8 percent was a record first quarter performance, and our passenger yields per revenue passenger mile (RPM) were up 4.7 percent compared to first quarter 2007.
Ya, I will take a little of that action!
NEW YORK (Reuters) - Continental Airlines Inc (CAL.N: Quote, Profile, Research) on Thursday posted a first-quarter loss as record fuel costs continue to roil the industry.
The fourth-largest U.S. carrier reported a net loss of $80 million, or 81 cents a share, compared with a year-earlier profit of $22 million, or 21 cents a share.
Excluding special items, the loss was 86 cents a share. Analysts on average had expected a loss of 94 cents, according to Reuters Estimates.
Revenue increased 12.3 percent to $3.6 billion, helped by fuel surcharges and international growth.
Rising costs and a weak U.S. economy helped prompt a merger deal between two of Continental's biggest rivals, Delta Air Lines (DAL.N: Quote, Profile, Research) and Northwest Airlines Corp (NWA.N: Quote, Profile, Research), and could spur a wave of further consolidation amid fears of falling travel demand.
firstthird
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Actually, the highest number I ever saw for code share was 50 million in revenue for the year. Our total revenue for 2007 was just over 9 billion. So, the highest that codeshare ever got was less than 1% of our revenue.
I suspect we'll take a charge in the 2nd quarter that will wipe our most of the PROFIT (as opposed to revenue) that we made over the entire course of the codeshare, due to payouts owed to ATA customers who booked through our website.
I suspect we'll take a charge in the 2nd quarter that will wipe our most of the PROFIT (as opposed to revenue) that we made over the entire course of the codeshare, due to payouts owed to ATA customers who booked through our website.
embpic1
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Ummm. I think your right. I think SWAs fuel hedges had a definite play in this. Now that being said, I think the fuel hedges that SWA is now enjoying was a brilliant move by your management. I am sure that as the hedges run out, they will have to increase their ticket prices or come up with some other way to compensate for higher fuel prices.
Arrrrgggghhhh....OK...here we go again <eyes rolling>
the hedges don't run out. We have a fuel purchasing office where all they do is negotiate and re-negotiate and re-negotiate some more...on the price of fuel...both today's price and in the future.
the hedges are a part of the business plan...for today ...and the future....
Open book test tomorrow...
Tanker Clown
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Yeah....but when those renegotiated hedges run out, you guys are screwed.
vikesfanIV
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True but it's not that simple. The fuel hedges don't run out (right now they go out as far as 2012 for 15% of estimated fuel consumption at around $63/barrel) and they are constantly doing their best to get future hedging contracts, but the monetery benefit from them is definatley declining. It's simply not possible to hedge as effectively with oil at $115. If it were that simple every airline would be doing it right now since most legacy carriers have billions in short term cash. SWA has a slight advantage because of their balance sheet and credit rating but they can't just magically keep hedging at $51/barrel when oil is currently sitting at $115. There is also a large downside risk to any airline hedging right now with oil this high. If oil goes back down to $85 and you hedged at $110 you are now at a big disadvantage to everyone else.
SWA knows they need to generate extra revenue to make up for their increasing fuel bill over the next few years. That's why there's a push to generate an extra $1.5 billion in revenue. I've done the math and if you look at the difference in their fuel bill from 90% hedged at $51/barrel to 30% hedged at $63/barrel (their hedge position for 2010) it no kidding comes out to around $1.4 billion. It's not a coiencedence that's the amount SWA planes to make in additional revenue annually by 2010. From the earnings webcast today it sounds like they are off to a good start on some of their revenue initiatives and slightly ahead of expectations so far.
lowecur
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You may want to check with that office. From what I've heard through the grapevine, futures contracts have all but dried up on heating oil and related. It may be next to impossible for airlines to purchase these in the coming years. I see Gary has canceled the $500M stock buy back....smart....He'll need it to keep the pilots happy.
Gee, I wonder if the pilots will do anything to help the airline with givebacks in the coming years?
You are going to see all sorts of capacity cut backs in 2009 as this economy shrivels into a manhood only SWA/FO would be proud of. A high percentage of the leisure crowd will no longer be able to afford to travel, and WN better get cranking to get the high margin business traveler if they expect to maintain enough revenue to break even. 
imp:
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vikesfanIV
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Vixin,
Tell me what part of my post you disagree with or think is false.
I'm soon going to be working for SWA and joining your company so it's not like I'm hoping they don't succeed or something. But the numbers don't lie. I've listened to every earnings conference call and read every financial release they've had for the last year. I'm not saying they won't have future hedges but I am saying there is no way future hedges will be anywhere close to $51 barrel. They ARE going to see a signicant increase in fuel costs between now and 2010 no matter how much hedging they try to do. I don't see how you can argue that point.
If you go back and research a few years back on Flight Froums regarding Southwest fuel hedging the same guys were saying this same thing about our options when they were at $25 a barrel. Then it was $30 a barrel. Then it was $40 a barrel. Now its $50. Getting the idea? It keeps changing constantly. Some day they may not be available or not worth getting but for now they are.
You have to have money to pay for these futures a head of time. Most airlines didn't have money but they used the bankruptcy courts to get rid of there debt a few years back. Now they have money but the ratings are not good plus they are now showing big loss numbers again so how long will the bank account hold this time?
Southwest and also SWAPA gives us an incredible amount of information regarding how these options work, when and why they change. When your in training you will get some of this information. The longer your here the more information you will get and will fully understand how they work.
We are fortunate to have good management that makes good decisions. They have been a head of the curve for 37 years and I hope it continues allot longer.
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