SWA Sept Load Factor

[LiveFreeorDie]

Hot off the presses at Yahoo...

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DALLAS -(Dow Jones)- Southwest Airlines Co. (NYSE:LUV - News) September traffic rose 25.8% to 3.26 billion revenue passenger miles from 2.59 billion revenue passenger miles a year earlier. The Sept. 11 attacks and their aftermath significantly hurt year-ago results.

A revenue passenger mile is one paying passenger flown one mile.

In a press release Wednesday, the nation's sixth-largest airline said September load factor, or percentage of seats filled, rose to 56.8% from 53.4% the year before.

In September 2000, Southwest's traffic rose 15.9% to 3.3 billion revenue passenger miles. Load factor grew to 65.7% from 63.9% in September 1999.

In the third quarter, Southwest traffic increased 5.8% to 11.92 billion from 11.26 billion last year. Load factor fell to 67.7% from 69.1%.

For the first nine months of the year, Southwest recorded a 1.8% increase in revenue passenger miles to 34.31 billion from 33.71 billion last year. The company's load factor declined to 66.9% from 69.4%.

Company Web site: http://www.southwest.com

-Lisa Reynolds; Dow Jones Newswires; 201-938-5400
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Thought this sounded good.

-Live Free or Die

 

[CaptWidgeon]

Found this on an American board, posted by someone who copied it from a United board. I would like to pass it along on the Southwest board, and use all of the boards to build a raft!!! This is the first time I've seen it so I hope it's not a repeat post.



WSJ article September 17, 2002
THE MIDDLE SEAT
By SCOTT MCCARTNEY

Secret to Southwest's Success
May Lie in Its Labor Contracts
UAL Corp.'s United Airlines faced a deadline on Monday for
getting agreement with its unions on cost savings that could
forestall a bankruptcy filing. Lest you think management cynically
set the deadline on the Jewish holiday Yom Kippur -- the Day of
Atonement -- the deadline was postponed.
US Airways Group Inc. filed for bankruptcy court protection after
it couldn't reach agreement with the its mechanics. Contract talks
with pilots at AMR Corp.'s American Airlines have been
underway for 14 months, and appear to be in a holding pattern.
Continental Airlines has been in talks with its mechanics for well
more than a year, and no deal.
Did you notice, though, that last month, in the middle of all this
labor-management acrimony, Southwest Airlines very quietly got
new contract agreements with both its pilots and its mechanics?
Those new contracts are hugely significant for the entire airline
industry, and the flying public. For a long time, rival airlines and
many others predicted that Southwest's day of reckoning was at
hand. After 29 years of uninterrupted profitability, including last
year, pilots and mechanics at Southwest were hungry for big-time
raises to put them in the same rarified wage-earning brackets as
pilots and mechanics at other airlines. The low-cost advantages
Southwest had over other airlines would narrow, rival airline
executives predicted with a hint of glee. Soon, Southwest
managers would face the same problems they faced.
Then came Sept. 11.
In the ensuing crisis, Southwest used its deep financial pockets to
keep flying almost its entire schedule. It didn't lay off a single
employee. Even though security snarls and travel fears seriously
impacted short trips -- Southwest's bread and butter -- the nation's
sixth-largest carrier has managed to remain profitable while all
other majors have suffered huge losses.
Why? Because of low costs and a productive work force. At no
time have those advantages been more striking than right now.
And the really interesting thing is that Southwest's employees
appear to have understood that. The recent contract deals suggest
they bought into the company philosophy and realized even more
that if the airline does well, they will do well.
Look at the Southwest pilots. Before Sept. 11, the company
offered a two-year contract extension with pay increases tied to
company profitability, plus a healthy chunk of stock options.
Union leadership declared the offer dead on arrival.
Southwest's union had a serious internal split between older pilots
and younger pilots. The old guard believes in the company's
growth, and many have become millionaires with company stock,
including stock options pilots received in 1994 in exchange for
agreeing to a 10-year contract that froze pay for five years then
offered only 3% raises the rest of the way. The younger pilots --
and Southwest has a lot of them since it has grown so much in the
past few years -- have seen friends at other airlines earn fatter
paychecks after only a couple of years on the job. They were
pushing for parity in pay scales.
Wall Street analysts, like union leaders, thought the deal was dead
because Southwest pilots wanted United-like wages, and this deal
didn't offer anything close to that.
Yet Southwest's pilots overwhelmingly approved the contract
extension by a 2-to-1 margin. (For contract details, click here1.)
After Sept. 11, the younger pilots at Southwest saw other airlines
lay off those same friends who had crowed about their fatter
paychecks. The advantage of being a low-cost carrier made more
sense. Modest pay increases looked more appealing in the current
environment. And with Southwest stock depressed, the lure of
options to buy 39.2 million shares of Southwest common stock -- an average of 9,500 for each
pilot -- at $12.835 a share looked more enticing, too. If Southwest shares get back to only $25,
each pilot would, on average, have a chunk of more than $100,000.
Listen to this statement from the president of Southwest's pilots union, and compare it to others
you hear these days elsewhere in the industry. "We feel Southwest is extremely well positioned to
take advantage of the recent turmoil in the industry," Capt. Jon Weaks said after the vote, "and
expect, with the support of our pilots, [Southwest] will become the dominant domestic carrier in
the country."
Southwest now has its pilots locked up until 2006 at wages that the company says will allow it to
continue its growth and keep its costs in check. Shortly after that, negotiators for Southwest's
mechanics, who had already rejected one tentative deal and taken the airline to federal mediation,
agreed to a new four-year contract offering both pay raises and stock options. A ratification vote is
pending
To be sure, plenty of workers at Southwest are still hankering for industry-leading wages at what
they now consider the industry-leading airline, and labor trouble could still loom ahead. A Boeing
737 captain with 12 years experience earns $149 an hour at Southwest, compared to up to $235 an
hour at Delta Air Lines and $209 at United, according to a recent survey. That's a big disparity,
although paychecks aren't as different as that would indicate. The Southwest pilot flies more hours
a year, on average, and doesn't necessarily work more days since Southwest pilots spend far less
time sitting around between flights. Mix in stock options and profit sharing, and Southwest pilots
retire millionaires just like other pilots.
The beauty of these deals is that they show Southwest still has its employees interests aligned with
company interests. Employees understand that less hourly pay, or longer work schedules, can be
more beneficial to them in the long run -- that they will do well if the company does well. A
growing airline offers more opportunity, whether through seniority enhancement or promotions. A
profitable airline means job security, stock appreciation and profit-sharing. The quickest way to
tell that management and labor interests are aligned at Southwest is to look at the pilots' union
Web site3 -- it has a button to check the stock price right at the top of the first page.
The problem other carriers face is that management has failed to get unions similarly aligned. You
can argue over whose fault that is -- management or labor. Either way, what exists is a vicious
cycle. Employees resist pay cuts when times are tough. (One slogan running around some corners
of United: "Full pay until last day.") Management blames unions for its troubles; unions blame
management and argue that pay cuts never saved a sinking airline. And then -- and this is more
significant -- after agreeing to some pay cuts, employees demand and receive "snap backs" and
huge raises when times are good. Usually just as that happens, the economy turns south, and the
cycle repeats.
All the while, neither side gets to the real issue, which is that in order to be competitive, old-line
airlines have to get more productive, or they will eventually perish.
The labor-management showdown at United, all the more remarkable and all the more difficult
because it is an employee-owned company, will likely just be one in a series of contract
showdowns at struggling airlines over the next year or two. And yet absent from the turmoil will
be the one airline that other carriers thought would have to face labor-management battles and
higher costs.
Instead of flying through the storm, Southwest flew over it. By doing so, Southwest has increased
the pressure on struggling carriers to find a way out of the cyclone.
9/19/02










Good thing Widgeons float...

 

[Seeniner]

SWA flew over the storm? We all know it is much safer to fly around a storm.

The new contract at SWA didn't start out quiet. In fact, it seemed to be getting rather ugly, at least for SWA. It would have been interesting to see the outcome had the September 11 tradgedies not happened.

Funny how nothing was mentioned about how NWA actually led the way in this recent area of contract extensions.

I'll tell you, stock options are great when they go up, but there are very few companies I'd want to work for and take stock options in. None of these companies are in the travel industry.

See

 

[Aplus9]

"I'll tell you, stock options are great when they go up, but there are very few companies I'd want to work for and take stock options in. None of these companies are in the travel industry."

See,

With the exception of SWA, of course. I agree. If you work for any other major, better to take the higher hourly wage, because the stock will never be worth anything (PE/ratio that is).

 

[LuckyDad]

Good thing no one is twisting your arm and making you work for SWA...