Swa To Slow Acft Deliveries

[SWA2000]

During Kelly's analyst meeting he said they are reducing the number of additional acft buy 15 for 2008. Planning on adding only 19. Also slowing growth to 6% vs. 8%. However, things can always change.

 

[RyansDad]

Is the glass half empty or half full....adding 19 aircraft and growing capacity by 6% is still growth! The article also says they are planning to generate additional revenue in other areas. Im sure everyone at SW would love to see higher growth numbers but only if the market can support it. Sounds like a responsible move on managements part.

 

[Whataburger]

Not great news, but I imagine there are a dozen airlines that would like to "only" get 19 brand new planes next year.

 

[Daddy]

I think we still get the 34 new ones, but we can a few more old ones...maybe the 500's

 

[GFunk20]

Yeah looks like the -700s will keep coming to replace -300s.

 

[RyansDad]

whats the best guess of how many new hires this will be for the rest of the year and 08 with additional aircraft and/or retirements? Also do you think this will have any impact on the LAS base opening in OCT?

 

[ALSF 2]

Not all that bad!

I personally think this is a smart move by the company. If the revenue is not increasing for each aircraft being brought on line, The company needs to rethink it's growth plan and correct the path of the company. This course correction will allow them to slow things down and focus on the returning to the kind of profitability that they want.


Cheers!

 

[Red Baron]

Southwest Airlines Announces Plans for Fourth Quarter and 2008
Wednesday June 27, 11:00 am ET Carrier Sets Course With New Initiatives; Additional Revenue Target of More Than $1 Billion
DALLAS, June 27 /PRNewswire-FirstCall/ -- Speaking to financial analysts and investors today after ringing the Bell on the 30th Anniversary of "LUV" trading at the New York Stock Exchange, Southwest Airlines CEO Gary Kelly outlined plans to improve the Company's profit growth. The airline will slow its fourth quarter 2007 available seat mile growth and optimize its flight schedule. In addition, Southwest announced it now plans to grow its fleet in 2008 by 19 net aircraft, 15 fewer than was previously reported. Kelly said slowing capacity growth will allow the carrier time to implement and evaluate the effectiveness of several initiatives Southwest intends to launch in fourth quarter 2007.
"Given the slowing U.S. economy and fuel cost pressures, we are taking these steps to adjust our capacity growth rate, which will help to restore profit growth," Kelly said. "If we find that conditions change, we will reevaluate our growth plans for future periods. In this economic environment, we simply need to take less risk and grow more slowly."
"For both fourth quarter 2007 and full year 2008, we currently plan to grow available seat miles (ASMs) year-over-year by approximately six percent, or about two percentage points less than previously reported. We also plan to implement a variety of revenue-enhancing initiatives by the end of 2007 that set the stage for continued profitability into the future," he said.
During fourth quarter 2007, Kelly said Southwest plans to: * Slow its available seat mile (ASM) growth to approximately six percent * Enhance its low-fare structure * Enhance its Rapid Rewards frequent flyer program * Launch a new advertising campaign * Unveil a new boarding/seating method
"We are very excited about major revenue initiatives that are scheduled for implementation by the end of this year. In all, we are targeting more than $1 billion in incremental revenue over the next few years to overcome higher fuel costs and reach our financial targets," Kelly said. Through the elimination of 39 existing roundtrip flights from its current flight schedule, Kelly said Southwest today has added 46 new roundtrip flights in key growth market cities such as Denver and New Orleans. For information on the flight changes in each city, go to: http://www.southwest.com/about_swa/press/070627_chart.pdf




Looks like some form of assigned seating is also on the way! As far as aircraft, I believe we most likely will give back leased ones, or some of the -500's. Only time will tell. At least our management is taking action now than later. Let's concentrate on the product we have and how to make it better.

RB

 

[CF34-3B1]

Looks like some form of assigned seating is also on the way! RB

It's an ICAO thing. We need to do it for the international routes.

 

[Full of LUV]

More revenue?

. We also plan to implement a variety of revenue-enhancing initiatives by the end of 2007 that set the stage for continued profitability into the future," he said.
During fourth quarter 2007, Kelly said Southwest plans to: * Slow its available seat mile (ASM) growth to approximately six percent * Enhance its low-fare structure * Enhance its Rapid Rewards frequent flyer program * Launch a new advertising campaign * Unveil a new boarding/seating method
"We are very excited about major revenue initiatives that are scheduled for implementation by the end of this year. In all, we are targeting more than $1 billion in incremental revenue over the next few years to overcome higher fuel costs and reach our financial targets," RB

I think they will raise revenue by offering first dibs on seats for a revenue "premium". Maybe like $5 gets you first boading priority, only the poor will sit in the middle.

Oh drats, world domination delayed by 6 months.