SWA profits off 77%

[Tejas-Jet]

I knew it was just a matter of time before the real world catches up with Southwest. There will be challenges ahead for them in all areas. Sometimes a reality check is so poetic. Good luck and welcome to the real world that all of the rest of us have to wake up to every day.

What is this "real world" that you speak of?

Could it be....Bankruptcies? Pay and benefit loss? Poor business plans? Putting your airline out for sale? Executive bonus programs? Cutting employees and claiming to be more efficient, yet maintaining the same old ( and failed) inefficient hub and spoke business model? Pension terminations? Having an airplane sit at the gate for 55 minutes to 1+15 during a turn? Rampers still unloading and loading bags the old "union" way?

What is it?

Tejas

 

[FlyBoeingJets]

I simply making a prediction on what I believe is going to happen. 2007 is proabaly going to be a very bad year for non-corporate travel, maybe the worst in many years....

furthermore, they continue to increase capacity. If this trend continues and the economy dips a little bit, which it is predicted to do, SWA may fall below profitable capacity.

I hear you. Not arguing your assumption 2007 will be a bad year. We will see.

I just don't see how you go from over 2.9B in the bank will little debt and over 4B in assets available to leverage to BK in 3 years.

Remember, all the capacity increases were matched by capacity reductions elsewhere. It's easy to stop the capacity growth, temporarily park airplanes and stop hiring if you are growing. Its not like the pain of furloughing and creating a waterfall of training events. If some '300s got parked it would drastically DECREASE SWA's fuel and maintenance bill. Open time and overtime for pilots would dry up and monthly pay would go down. If you don't fly the planes a lot of expenses simply aren't there.

But lower oil is already helping the economy. The spike up didn't hurt it as bad as some thought either. MHO, but the fallout may show up in 2007.

 

[Bubba Dog]

What is this "real world" that you speak of?

Could it be....Bankruptcies? Pay and benefit loss? Poor business plans? Putting your airline out for sale? Executive bonus programs? Cutting employees and claiming to be more efficient, yet maintaining the same old ( and failed) inefficient hub and spoke business model? Pension terminations? Having an airplane sit at the gate for 55 minutes to 1+15 during a turn? Rampers still unloading and loading bags the old "union" way?

What is it?

Tejas

Your cost are soon to be higher than revenue generated from a myriad of operational areas.The flight deck is just one example. Look at what other carriers are paying their flight deck crew members,not to mention their rampers,gate agents, and the list goes on and on. Fuel hedges are slowly running out,point to point flying is becoming less and less profitable as the other LCC's enter and cherry pick the lowest hanging fruit. I believe you will all wake up someday and wonder just what the heck has happened to our nirvana. Pride cometh before the fall.

 

[YourPilotFriend]

I hear you. Not arguing your assumption 2007 will be a bad year. We will see.

I just don't see how you go from over 2.9B in the bank will little debt and over 4B in assets available to leverage to BK in 3 years.

Remember, all the capacity increases were matched by capacity reductions elsewhere. It's easy to stop the capacity growth, temporarily park airplanes and stop hiring if you are growing. Its not like the pain of furloughing and creating a waterfall of training events. If some '300s got parked it would drastically DECREASE SWA's fuel and maintenance bill. Open time and overtime for pilots would dry up and monthly pay would go down. If you don't fly the planes a lot of expenses simply aren't there.

But lower oil is already helping the economy. The spike up didn't hurt it as bad as some thought either. MHO, but the fallout may show up in 2007.

I'm not saying they will run out of money, it's just that bankruptcy allows you to make drastic but necessary changes to the business model without destroying the company. SWA's mission statement is to serve the employee and the customer is secondary, that's only possible when your tickets are the lowest price. Remember, your next $10 fare increase put's food, blankets, pillows, and a TV in every seatback on NWA.

 

[ivauir]

Why I caution everyone, is because in my opinion, SWA will be in bankruptcy without major labor cuts by 2009; .

You are almost as full of it as lowcur. look at our capitalization and think again. Wishing it doesn't make it true.

 

[lowecur]

You are almost as full of it as lowcur. Pleeease....I don't see WN in BK, unless the world economy takes a poop. look at our capitalization and think again. Wishing it doesn't make it true.

My only remarks are about the hubris posted from individuals who are clueless that the gravytrain will continue without some serious changes. My solution of the E-jets to save the current rate structure is just only one of a few options that also include a reduction of rates in the neighborhood of 20% if SWAPA insists on no E-jets on the property. Of course SWAPA will continue to play watch and see for 24 months, and then there will be a revolt within the membership to replace the current reps.

imp:​

 

[mdf]

Wasn't it around 150 million before the one time charge for "unrealized losses" due to the hedge position. That would be the decrease in the value of the futures contracts set to expire at a later date, because of the recent drop in oil prices. This in essence is a paper loss right now, and real dollar losses won't be seen until the positions are settled. 150 million is not that great. I know challenges are still ahead, but all the doom and gloom over this particular quarter is a little overstated. Someone please correct me if I am wrong.

 

[SWA/FO]

My only remarks are about the hubris posted from individuals who are clueless that the gravytrain will continue without some serious changes. My solution of the E-jets to save the current rate structure is just only one of a few options that also include a reduction of rates in the neighborhood of 20% if SWAPA insists on no E-jets on the property. Of course SWAPA will continue to play watch and see for 24 months, and then there will be a revolt within the membership to replace the current reps.

I use to think you were funny typing away with your retarded blue ink. I think you might have smoked way to much crack, this time. Why don't we change gears and talk about airlines that are already BROKE, instead of hoping that someday, ours breaks. Here some good future topics for your HOMO blue type. Will NWA make it? Will DAL make it? Will jetBlue get on track again? Who will CAL buy? How many of these SWA bashers, didn't get offered a job here and now hate us?

 

[RDG]

Predicting the demise of Southwest Airlines. Its good to see a 35 year old tradition continue. May it last another 35 years!! :beer:

 

[TexaSWA]

Your cost are soon to be higher than revenue generated from a myriad of operational areas..

How do you figure?