And please don't try to compare profits MAX. DL's 2nd quarter profit will probably be larger than SWA's full year. Bag fees, like the ones you guys still feed SWA to fund your merger, really help. You may have to paint over a bunch of the SWA 737s that say "Bags fly free here." Otherwise, management may look for other ways to increase profitability. You know, SWA isn't really a LCC anymore, longevity is starting to affect the bottom line. Not as many new hires over there, and your certain stagnation will not help the situation. I would be "for" extra fees if I were you.well. ($195 an hour for 12th year longevity, or almost all the captains, by 2015 when they will all be on the property, and that will be the smallest plane at DL)
Let's compare profitability and financial health General. Due to Delta still carrying forward years of unprofitability, Delta paid no corporate taxes during Q2 while Southwest paid $140 million. So let's take a look at Delta and Southwest's pre-tax margins excluding special items for both carriers (an apples to apples comparison):
Delta Q2 pre-tax profit: $844 million
Delta Q2 revenue: $9.71 billion
Delta Q2 pre-tax margin: 8.7%
Southwest Q2 pre-tax profit: $413 million
Southwest Q2 revenue: $4.64 billion
Southwest Q2 pre-tax margin: 8.9%
That's right General. Without bag fees, Southwest posted a higher pre-tax margin than Delta. Maybe customers don't like being nickeled and dimed to death and choose Southwest over the other guys.
While we are comparing, let's take a look at cash levels and the big liabilities on the balance sheet as of June 30, 2013:
Delta Long Term Debt: $10.5 billion
Delta Unfunded Pension Obligation: $15.4 billion
Delta unrestricted cash and short term investments: $3.9 billion
Southwest Long Term Debt: $2.7 billion
Southwest Unfunded Pension Obligations: $0
Southwest unrestricted cash and short term investments: $3.4 billion
So General, which airline do you want to be working for the next time this country go into a recession? The one with a lot of liabilities or the one with a lot of cash and paid off assets?