SWA reports $159M profit for 2nd Q

[lowecur]

Kudos to Kelly and Co. Just one problem............$196M investment income from Hedges leaves a $37M operating loss. Cash is king, as they have increased it to $2.2B.

http://biz.yahoo.com/prnews/050714/dath013.html?.v=20

For those that are interested BELF is .647 or rounded to 65%. Throw out the fuel hedging and it's probably more like 74%.

 

[mamba20]

Exactly right Lowecur, SWA isnt making nearly as much money as it sounds like they. Still in the black but just about breaking even.

 

[SWA/FO]

yeah baby...PROFIT!

 

[T45Flyer]

"second quarter 2005 unit costs decreased 3.5 percent". Very Nice.

 

[lowecur]

What will be interesting this quarter is to see how unhedged airlines like AMR and CAL match up on operational profit or loss. These are traditional hub and spoke airlines that have gotten their costs in line, but in AMRs case they still have large pension costs that drain the bottom line.

The hedging will allow mgt to keep procrastinating on employee costs, but eventually they will have to go nose to nose with the various groups. It will be interesting to see if things get acrimonious.

 

[mamba20]

Not interesting, its sick. This is the only profession where when times get tight the worker bee's have to give back to keep the company going while management still trys to figure out where to go boating this weekend. Just raise ticket prices already! Southwest can't carry everyone!

 

[Captain Overs]

Exactly right Lowecur, SWA isnt making nearly as much money as it sounds like they. Still in the black but just about breaking even.

You need to lay off the Fox News Channel. Your spin sounds like it came straight from the "Fair and Balanced" network.

What do you mean SWA isn't making "Nearly as much money as it sounds like they are."? Money is money. Who cares if they are in a position to hedge fuel and so they made $139 million. You can't say "We made $139 million selling ice cream, but if we had bought our milk at $4 a gallon we would have lost money." Don't give management ideas because United will use it to try and take more money away from employees.

 

[Buckaroo]

Gary is pleased

Just listened to the earnings conference call. Gary is pleased.

 

[mwmav8r01]

Raise Ticket Prices Already! No More Pay Cuts!

 

[flint4xx]

Southwest can't carry everyone!

We'll see about that...

 

[Sailpilot]

never mind

 

[Red Baron]

Raise Ticket Prices Already! No More Pay Cuts!

Don't worry. We are not cutting pay, but increasing it!

Happy Flying,

RB

 

[J3CubCapt]

Kudos to Kelly and Co. Just one problem............$196M investment income from Hedges leaves a $37M operating loss. Cash is king, as they have increased it to $2.2B.

http://biz.yahoo.com/prnews/050714/dath013.html?.v=20

For those that are interested BELF is .647 or rounded to 65%. Throw out the fuel hedging and it's probably more like 74%.

Give me a F'ing break Lowecur, Atleast we are not staying in business because of Goverment Bailouts and slashing jobs. Who the hell cares how the profit is made, It is a profit!

Eat my grits!

J3

 

[skykid]

Give me a F'ing break Lowecur, Atleast we are not staying in business because of Goverment Bailouts and slashing jobs.

Southwest didn't take any of the 5 billion after Sep 11? Great, I didn't know that. Obviously Southwest didn't need that money to survive, but you have no idea what you are talking about with "government bailouts."

Lowecur, granted Southwest is making money with hedges now, but I bet they have the pricing power to raise prices when they need to, unlike most of the other airlines.

 

[lowecur]

Lowecur, granted Southwest is making money with hedges now, but I bet they have the pricing power to raise prices when they need to, unlike most of the other airlines.

SWA still has great pricing power, but attrition will take it's toll in the next 5 years unless they get their bloated payroll in line.

 

[Yank McCobb]

If this isn't a sure sign the apocolypse is upon us. Someone referring to the SWA payroll as "bloated"...and actually meaning it.

The same SWA that for years and years was the scourge of the industry in the eyes of every other company's pilots for "bringing down the profession" with substandard pay.

 

[skykid]

SWA still has great pricing power, but attrition will take it's toll in the next 5 years unless they get their bloated payroll in line.

So, bottom line is just what I said - Southwest can make money now with fuel hedges, and can raise prices when they need to. And they are in trouble how? Meanwhile their pilots are the best paid - I wouldn't call it bloated considering their bottom line.

 

[DAS at 10/250]

Kudos SWA!

 

[FlyinScotsman]

If this isn't a sure sign the apocolypse is upon us. Someone referring to the SWA payroll as "bloated"...and actually meaning it.

The same SWA that for years and years was the scourge of the industry in the eyes of every other company's pilots for "bringing down the profession" with substandard pay.

Yank has a good observation. I remember hearing that same stuff from all who had the coveted United and Delta, NW etc jobs.

 

[T1bubba]

SWA still has great pricing power, but attrition will take it's toll in the next 5 years unless they get their bloated payroll in line.

Guess you missed these lines from today's news release-

2Q 2005 2Q 2004
Salaries, wages, and benefits 667 622 7.2 %
Size of fleet at period-end 434 405 7.2 %

The payroll grew at the same rate as the fleet, doesn't sound too bloated to me.

 

[TexaSWA]

Kudos to Kelly and Co. Just one problem............$196M investment income from Hedges leaves a $37M operating loss.

QUOTE]

Kudos to Warren Buffet for being one of the wealthiest people in the world. One problem, had he not made the shrewd investments he did in the past, he would be destitute.

That seems to be an accurate parallel to what you are saying wouldnt you say?

 

[cathaywannabe]

Unfortunately business forced me to leave the earnings call early yesterday.

I think I remember LUV saying that the ATA code-share is generating profits. Theoretically, could ATA be losing money while LUV is making money off the code share? I know that LUV owns a fraction of ATA, but I'm not certain about the rest.

 

[LearLove]

Don't worry. We are not cutting pay, but increasing it!

Happy Flying,

RB

Yeah, right, lets not even attempt to go there.

 

[FatesPawn]

SWA still has great pricing power, but attrition will take it's toll in the next 5 years unless they get their bloated payroll in line.

Hey quick-draw, Let's wait to call a spade a spade when a CASM comparison can be made after the rest of the industry releases their Q2 reports.

Bloated... I almost choked on my crewmeal.

Fate

 

[lowecur]

Hey quick-draw, Let's wait to call a spade a spade when a CASM comparison can be made after the rest of the industry releases their Q2 reports. Didn't ATA have a great CASM?

Bloated... I almost choked on my crewmeal. Try the AWA liquid diet.

Fate

.....

 

[Jim Smyth]

Lets see we made money with fuel hedges. The hedges have to be bought in advance. Thats money that was earned by the airline. Profit is profit the way I see it. When the gas goes up with our hedge price we will adjust ticket prices accordingly if need be.

 

[TAZ MAN]

Lets see we made money with fuel hedges. The hedges have to be bought in advance. Thats money that was earned by the airline. Profit is profit the way I see it. When the gas goes up with our hedge price we will adjust ticket prices accordingly if need be.

Thats what I think also. The executives at SWA seem to always have a plan.

By the way, I think that taking the 196 mil from the 159 mil net profit is not correct. SWA's operating income was 277 million. So take the hedges out and I believe that they would have an operating income of 81 mil. Then take the taxes out and you have a net income in the black.

I think the spin on this one is not accurate. Shocker.

 

[Red Baron]

Yeah, right, lets not even attempt to go there.

Let's go there. Our pay is holding the bar in the industry. When the operating environment improves, others will be looking at ours to match or top. That doesn't hurt anyone. As far as your management woes, don't blame it on us. We just keep doing what we have been doing for years, keeping fares low.

Happy flying,

RB

 

[satpak77]

SWA still has great pricing power, but attrition will take it's toll in the next 5 years unless they get their bloated payroll in line.

"Bloated Payroll?" Is this another way of saying "overpaid pilots?"

SWA is the best run airline in the biz, PERIOD, and arguably among the top 10 or 20 run companies in all of corporate america. So if you are an employee there, contributing to its success, it stands to reason you will be paid back.

"In the next 5 years" - where did you get that figure.

SWA got started in 1971, but didn't really begin its expansion till the late 70s. So for discussion, call it 1978 (27 years ago). Using Kit Darby's official average airline new-hire age of 32 years, that means that those guys are just NOW starting to retire.

Observe SWA purposely hires all age groups, contrary to AArogant Airlines who only hired 28 year olds who passed the famous family-tree medical application (some of you will remember that...). So the retirees are not gonna hit all at once, on one certain year. This is only one aspect of the smart management at SWA.

SWA will be around for a long long time

(hopefully long enough for me to retire from my Part 91 job and be a 50 year old F.O. and make the Capt's coffee for him...)

 

[lowecur]

Thats what I think also. The executives at SWA seem to always have a plan.

By the way, I think that taking the 196 mil from the 159 mil net profit is not correct. SWA's operating income was 277 million. So take the hedges out and I believe that they would have an operating income of 81 mil. Then take the taxes out and you have a net income in the black.

I think the spin on this one is not accurate. Shocker.

Taxes are $97M there Taz, and no matter where you put the hedges......you still have to pay taxes on them. You want to use gross operating profits without taxes, then be my guest and make yourself feel better.