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N1atEcon
Well-known member
- Joined
- Nov 17, 2002
- Posts
- 536
Some one may be looking to buy some things??????
[size=+2]TEXT-Fitch assigns Southwest Airlines' notes 'A'
(The following statement was released by the ratings agency)
NEW YORK, Sept 14 - Fitch Ratings has assigned a rating of 'A' to the $350 million of senior unsecured notes issued by Southwest Airlines Co . The notes mature in 2014. The Rating Outlook for Southwest is Stable.
Southwest's 'A' senior unsecured rating reflects the low-fare carrier's demonstrated ability to deliver sufficient levels of cash flow from operations to meet high aircraft capital spending commitments without driving debt levels significantly higher. Even as Southwest has boosted available seat mile (ASM) capacity growth rates (about 7% in 2004 and a projected growth rate of 10% in 2005), the airline retains the flexibility to meet heavy capital commitments almost entirely from operating cash flow. Fitch expects full-year operating cash flow generation of $1.4 billion to be large enough to fund heavy capital spending commitments (projected at $1.8 billion this year), without requiring the company to raise liquidity levels through large debt offerings. Capital spending will also be high in 2005, driven by the delivery of 34 new Boeing 737 aircraft, but earnings and operating cash flow growth next year should allow Southwest to report positive free cash flow.
Growth rates and capital spending commitments may be pushed higher if new network expansion opportunities arise in 2005. A potential liquidation of US Airways could trigger moves by Southwest to grow capacity at Philadelphia and/or Charlotte. However, significantly, new capital requirements in such a scenario could be funded through strong operating cash flow generated via high-margin new route additions in markets with substantial fare stimulation prospects.
The current $350 million issue allows Southwest to preserve its strong liquidity position ($1.8 billion in unrestricted cash on hand as of June 30) after $180 million of maturing debt obligations are funded in November. Management has noted in recent months that it is comfortable with modest reductions in the company's cash balance to approximately $1.5 billion. Thus, even after funding this year's large aircraft capital program, Southwest should finish the year with a liquidity position that is very strong by industry standards. Total unrestricted cash on hand now represents about 25% of full-year revenues, and the airline's undrawn $575 million credit facilities (maturities now extended to 2007) provide additional flexibility to guard against industry event risk.
Southwest reported another quarter of solid operating results in the period ended June 30, delivering an 8% year-over-year increase in passenger revenue per available seat mile (RASM) at a time when domestic fare pressure is very intense and industry capacity is growing at a rapid pace. Unit cost pressures are a continuing concern for the company, with very high jet fuel costs and new labor contract pay rates contributing to an increase of 8% in second quarter cost per available seat mile (CASM). However, capacity growth in the second half of 2004 and the moderation of year-over-year labor cost increases will ease unit cost comparisons significantly starting in the third quarter. Southwest management now expects CASM, which reached 8.09 cents in the second quarter, to fall back below 8 cents in the second half of the year.
An industry leading fuel hedging position, 80% of 2004 jet fuel exposure capped at less than $24 per barrel crude oil equivalent, represents a significant source of cost competitiveness versus other U.S. carriers. Still, the 20% of the Southwest fuel budget that remains exposed to market prices is contributing to substantial budget variances this year. Average jet fuel prices paid in the second quarter were 82 cents, versus 67 cents in the year-earlier period. Fuel hedge positions beyond 2004 are also strong, with 80% of expected 2005 deliveries hedged with caps below $25 per barrel of crude oil. The corresponding level for 2006 is 45% of exposure at $28 per barrel of crude.
Year-over-year gains in unit revenue are being driven entirely by better load factor results as Southwest engages in more aggressive fare sale activity to stimulate demand. Second quarter load factors improved by 6 points versus the year-earlier period, while yields slipped 1%. Management noted in its August traffic release that industry capacity additions are contributing to yield weakness in the third quarter. However, low fares are fueling robust traffic patterns. The airline's August load factor increased by 1.9 points on an available seat mile capacity increase of 8.6%. As for all U.S. carriers, weak pricing remains the principal revenue concern throughout the fall and winter periods ahead. The rapid ramp-up of service at Philadelphia, where Southwest is quickly grabbing market share from incumbent hub carrier US Airways, is driving much of the increase in scheduled capacity this year and will likely account for a large part of the projected 10% increase in system ASM capacity in 2005. While Southwest will be gate-constrained at Philadelphia after it grows its operation to 41 daily departures in October, further financial distress at bankrupt US Airways in 2005 could open up new opportunities for Southwest to grow Philadelphia service more aggressively next year.
As Southwest adds owned and unencumbered Boeing 737 aircraft to its fleet (405 aircraft in service as of June 30), asset protection for unsecured bondholders is supported further. This trend is likely to continue in 2005 with the arrival of the 34 new Boeing deliveries. With only $140 million in scheduled debt maturities next year, Southwest is in a position to deploy cash for the new aircraft without incurring additional debt.
The July appointment of long-time Chief Financial Officer Gary Kelly to the post of Vice Chairman and CEO provides support for the rating in underscoring the company's commitment to a continuation of its proven financial strategy. While senior management clearly faces an enduring challenge in its effort to limit increases in unit operating costs, the current team appears focused on the need to execute a financial strategy that preserves Southwest's strong credit profile.
[/size]
[size=+2]TEXT-Fitch assigns Southwest Airlines' notes 'A'
(The following statement was released by the ratings agency)
NEW YORK, Sept 14 - Fitch Ratings has assigned a rating of 'A' to the $350 million of senior unsecured notes issued by Southwest Airlines Co . The notes mature in 2014. The Rating Outlook for Southwest is Stable.
Southwest's 'A' senior unsecured rating reflects the low-fare carrier's demonstrated ability to deliver sufficient levels of cash flow from operations to meet high aircraft capital spending commitments without driving debt levels significantly higher. Even as Southwest has boosted available seat mile (ASM) capacity growth rates (about 7% in 2004 and a projected growth rate of 10% in 2005), the airline retains the flexibility to meet heavy capital commitments almost entirely from operating cash flow. Fitch expects full-year operating cash flow generation of $1.4 billion to be large enough to fund heavy capital spending commitments (projected at $1.8 billion this year), without requiring the company to raise liquidity levels through large debt offerings. Capital spending will also be high in 2005, driven by the delivery of 34 new Boeing 737 aircraft, but earnings and operating cash flow growth next year should allow Southwest to report positive free cash flow.
Growth rates and capital spending commitments may be pushed higher if new network expansion opportunities arise in 2005. A potential liquidation of US Airways could trigger moves by Southwest to grow capacity at Philadelphia and/or Charlotte. However, significantly, new capital requirements in such a scenario could be funded through strong operating cash flow generated via high-margin new route additions in markets with substantial fare stimulation prospects.
The current $350 million issue allows Southwest to preserve its strong liquidity position ($1.8 billion in unrestricted cash on hand as of June 30) after $180 million of maturing debt obligations are funded in November. Management has noted in recent months that it is comfortable with modest reductions in the company's cash balance to approximately $1.5 billion. Thus, even after funding this year's large aircraft capital program, Southwest should finish the year with a liquidity position that is very strong by industry standards. Total unrestricted cash on hand now represents about 25% of full-year revenues, and the airline's undrawn $575 million credit facilities (maturities now extended to 2007) provide additional flexibility to guard against industry event risk.
Southwest reported another quarter of solid operating results in the period ended June 30, delivering an 8% year-over-year increase in passenger revenue per available seat mile (RASM) at a time when domestic fare pressure is very intense and industry capacity is growing at a rapid pace. Unit cost pressures are a continuing concern for the company, with very high jet fuel costs and new labor contract pay rates contributing to an increase of 8% in second quarter cost per available seat mile (CASM). However, capacity growth in the second half of 2004 and the moderation of year-over-year labor cost increases will ease unit cost comparisons significantly starting in the third quarter. Southwest management now expects CASM, which reached 8.09 cents in the second quarter, to fall back below 8 cents in the second half of the year.
An industry leading fuel hedging position, 80% of 2004 jet fuel exposure capped at less than $24 per barrel crude oil equivalent, represents a significant source of cost competitiveness versus other U.S. carriers. Still, the 20% of the Southwest fuel budget that remains exposed to market prices is contributing to substantial budget variances this year. Average jet fuel prices paid in the second quarter were 82 cents, versus 67 cents in the year-earlier period. Fuel hedge positions beyond 2004 are also strong, with 80% of expected 2005 deliveries hedged with caps below $25 per barrel of crude oil. The corresponding level for 2006 is 45% of exposure at $28 per barrel of crude.
Year-over-year gains in unit revenue are being driven entirely by better load factor results as Southwest engages in more aggressive fare sale activity to stimulate demand. Second quarter load factors improved by 6 points versus the year-earlier period, while yields slipped 1%. Management noted in its August traffic release that industry capacity additions are contributing to yield weakness in the third quarter. However, low fares are fueling robust traffic patterns. The airline's August load factor increased by 1.9 points on an available seat mile capacity increase of 8.6%. As for all U.S. carriers, weak pricing remains the principal revenue concern throughout the fall and winter periods ahead. The rapid ramp-up of service at Philadelphia, where Southwest is quickly grabbing market share from incumbent hub carrier US Airways, is driving much of the increase in scheduled capacity this year and will likely account for a large part of the projected 10% increase in system ASM capacity in 2005. While Southwest will be gate-constrained at Philadelphia after it grows its operation to 41 daily departures in October, further financial distress at bankrupt US Airways in 2005 could open up new opportunities for Southwest to grow Philadelphia service more aggressively next year.
As Southwest adds owned and unencumbered Boeing 737 aircraft to its fleet (405 aircraft in service as of June 30), asset protection for unsecured bondholders is supported further. This trend is likely to continue in 2005 with the arrival of the 34 new Boeing deliveries. With only $140 million in scheduled debt maturities next year, Southwest is in a position to deploy cash for the new aircraft without incurring additional debt.
The July appointment of long-time Chief Financial Officer Gary Kelly to the post of Vice Chairman and CEO provides support for the rating in underscoring the company's commitment to a continuation of its proven financial strategy. While senior management clearly faces an enduring challenge in its effort to limit increases in unit operating costs, the current team appears focused on the need to execute a financial strategy that preserves Southwest's strong credit profile.
[/size]
I've been hearing lots of interesting things on the horizon lately. Looks like Gary may be making some changes to the Southwest business plan to keep us competitive with other low cost carriers. However, I don't see us buying any other airlines. Maybe their airplanes if they have -700s, but IMHO, the Leadership of this airline is all too aware of the damage to our Culture if we buy another airline in its whole form.
Although the books and newpapers will talk about how smooth the Morris acquisition went, make no mistake that it was still a rough time for Southwest. I heard both Parker and Colleen say that Southwest would never acquire another airline, due to the stress for the employees involved on both sides (and a host of other reasons). And even though Parker is no longer there, Gary is a smart guy who knows better than to inherit another airline's mistakes. I've always heard a consistent message from our Leadership: we can grow quite well without acquiring another airline, thank you very much.
So I'd take the acquisition rumors as just that: rumors.
Although the books and newpapers will talk about how smooth the Morris acquisition went, make no mistake that it was still a rough time for Southwest. I heard both Parker and Colleen say that Southwest would never acquire another airline, due to the stress for the employees involved on both sides (and a host of other reasons). And even though Parker is no longer there, Gary is a smart guy who knows better than to inherit another airline's mistakes. I've always heard a consistent message from our Leadership: we can grow quite well without acquiring another airline, thank you very much.
So I'd take the acquisition rumors as just that: rumors.
RVR300
Well-known member
- Joined
- May 11, 2004
- Posts
- 100
I'm having trouble posting this... third attempt, but here goes.
Ran into some guys who heard that we are looking at the International Terminal at PHL. They said it is a new structure built for USAir(?) Dunno, haven't seen it.
Makes sense. All of the new guys keep saying that during the breakfast-formerly- with-Herb that PHL is going to be "BWI on steroids."
If that's the case, then the horrible terminal we're in now wouldn't seem to cut it.
Hope so, I'm getting pretty tired of City Deli in BWI.
Ran into some guys who heard that we are looking at the International Terminal at PHL. They said it is a new structure built for USAir(?) Dunno, haven't seen it.
Makes sense. All of the new guys keep saying that during the breakfast-formerly- with-Herb that PHL is going to be "BWI on steroids."
If that's the case, then the horrible terminal we're in now wouldn't seem to cut it.
Hope so, I'm getting pretty tired of City Deli in BWI.
Yahtzee
Season Ticket Holder
- Joined
- Apr 21, 2002
- Posts
- 301
Did you happen to hear anything at all about SWA going to ATL before next fall?LUVChild said:
Sure would make it easier for all us Dawgs Fans as we try to get back to Athens for those Saturday classics. Giving away my tickets is getting old already and we've only had one home game.
Yahtz
Last edited:
MLBWINGBORN
Freedom Fighter
- Joined
- Nov 27, 2001
- Posts
- 476
) on Saturday am at 0955 Herb Time in route to Vegas.
MLBWINGBORN
Freedom Fighter
- Joined
- Nov 27, 2001
- Posts
- 476
RightBettor
Betting "Don't" these day
- Joined
- Nov 27, 2001
- Posts
- 308
Dennis Miller
What about my Member
- Joined
- Mar 13, 2003
- Posts
- 200
I always hope for a gate close to Potbelly's whenever turning through MDW. I also avoid Rubios in SAN due to...well lets just say I had to take a break for a few when we got to LAS. Never had a problem with Rubios til then. Lived a few blocks away from the one in PB when I was stationed in Sandog and patronized them quite alot. The airport location is the only one I've had probs with.
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