Thread: SWA Hedging
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Old 04-30-2008 | 01:36 PM
  #46  
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From: B737/Capt
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Originally Posted by ewrbasedpilot
SWA has excellent hedging strategies which they can afford and the others can't due to their tremendous overhead expenses. Therefore they can keep the ticket prices "artificially" low. If they were paying the same for their oil, their would be NO WAY they could fly their planes with oil at what it is. The other airlines are constantly compared to SWA even though the business models are COMPLETELY different. They figure if SWA can make money, everyone else should. They don't understand that flying a B777 for 16 hours across the pond is NOT the same as hopping on a B737 from AMA to IAH. They think the costs are the same for a landing slot in FRA for the B777 as they are for a B737 landing in ABQ. They think we can turn a B777 around in 15 minutes just like SWA does. So when they DO fly on someone else, they are totally mislead about the dynamics and complexity of what we do. SWA is great at what they do, but it is so totally different than what the majors do. Yes, we both carry passengers, but you don't have first class, transfer luggage, fly internationally, fly into EWR, ORD, JFK, YYZ, etc. You don't serve meals, and fly transcon redeyes from LAX to EWR. You fly one type of plane and we don't. Their are lots of similarities, but many MAJOR differences. Unfortunately though, these passengers think SWA is the best thing since sliced bread, but can't fathom that we operate differently. So, they are either extremely satisified with what they experience or totally put off. SWA didn't have any planes stranded outside the USA on 9-11. It cost the airlines with int'l flights BILLIONS in lost revenue. No one ever said anything about that, because the news media was totally absorbed by the fact that SWA made a profit and gave out the so-called "bailout" money as profit sharing. No mention of thousands of pax being stranded in BDA with the airlines paying out $10's of thousands in hotel bills. SWA didn't have that problem. As I said before, SWA is a well managed airline, but they are familiar with their territory, and like anything else, once you're out of your comfort zone, things change rapidly.
Thanks for your reply! I am not so sure you answered the question but again
as I said you and I have had our disagreements before. 9-11 is over and every airline had to make adjustments. Am I to believe that you think SWA should not have received the grants provided to all airlines? I believe that NO airline should have received any money because in a free market those that expose themselves to risk must plan properly for the worst. Yes, we added it to our profits and dispensed it in our profit sharing accordingly. The exposure to international events is a real threat to those who provide that service and the risks are evident in your reply. Perhaps that is why little 'ol SWA has not ventured in that direction at present. Rest assured that if that is where the money is SWA will follow and we will have to deal with all the difficulties you mentioned.

Perhaps I should have worded my question differently. How is it the domestic consumer has been hurt?

Now back to the thread subject of fuel hedges. I am of the belief that we gambled (Gary Kelly might beg to differ) and it has been extremely successful.
Sometimes those who take a risk are rewarded and sometimes they lose. Okay, I will say it, "I would rather be lucky than good."
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