Originally Posted by Gman
To all you finance experts:
Like to start a discussion about Soutwest Airlines financial future.
What will happen after fuel hedges expire and the airline has to compete
with all the other ones who have now lowered their costs?
Will employees loose their pay, will employer - employee relations change?
Will they be able to coast for a while due to cash on hand or are we looking at some drastic changes prior to 2009?
So SWA bashing please. It is a great airline, just wonder how long they will stay great.
Obviously, I don't work for SWA, but why do people think that they are not competing just because they have fuel hedges? They have great forward-looking folks oin their finance dept. and the cash to backup buying hedges. SWA has ALWAYS had low fares. That won't change in any big way in the future, I believe. It's the productivity of the workers, good debt management, and sound business policies that make them successful. Their pilots get paid well, and the harder you work, the more money you make. IT IS YOUR OWN CHOICE! If you want to fly your sked then go home, so be it. If you want to pick up open time, then great. No one is forced to work overtime.
Legacies got in trouble with debt and management that gave themselves huge bonuses for many years before 9-11. Then, when labor got a taste of the money in new contracts, and things started to go sour in the economy, labor is the first to get screwed. Did anyone see management saying that they will forgo their hefty bonuses first? I think not. SWA isn't organized like that. Everyone knows that they value their employees. And because of that, employees reciprocate by working hard. Novel concept, huh?
I just tire of these stupid threads of "What will SWA do when they have to compete?"