SWA sans hedges ...
 

SWA has undeniably maintained a profitable position throughout the post 2001 downturn. I read a lot of posts by various people stating that Southwest Airlines would not be profitable without their fuel hedges. My question to these omnisient analysts is this, "if SWA did not have fuel hedges, is it not conceviable that they would have modified their business plan to remain profitable in a difficult fuel-price environment?"

Here's are a couple of my speculative scenarios ...

1. Perhaps without fuel hedges SWA would have had to enact a more aggressive tactical plan, striking directly at the heart of troubled carriers, attracting passengers and revenue like a carnivorous predator. Charlotte. Denver. Minneapolis. Each might have seen phenomenal SWA start-ups while the former "hometown" carriers were collapsing to the turf, gasping and clamoring for the lifeblood of Chapter 11 only to realize their eventual fate of Chapter 7.

2. Maybe a massive retake on single-aircraft-type operations would have ushered in a fleet of long-haul wide-body aircraft to compete on the lucrative trans-con, or maybe even oceanic routes, fed directly by the expansive SWA domestic network.

Perhaps you laugh at my musings. I know I do because I know that history has already played out. And in that history, SWA was profitable every single quarter of every single year. To say that fuel hedges were the sole reason for SWA's profitability is to discount the ability of this highly capable management team to modify the company's plans and proposals. Maybe by not being forced to implement more aggressive practices Southwest's fuel hedges actually allowed the weaklings of the industry to survive.

Yes....they would have raised their fares.

I'm with ya. Fuel hedges are a tool in the business plan quiver, nothing more nothing less. SWA used this tool well and it paid off, in fact many airlines had/have hedges in place, it's just SWA's seem to be the most popular.

Sans hedges, an astute management will use other tools to achieve profits.

It is a mistake when people say that fuel hedges "saved" SWA. The fuel hedges are permitting SWA to grow into exisiting and new markets with aggressive and consistent low fares making it difficult or expensive for the competition to defend. Without the fuel hedges, SWA would have higher fares to cover costs and been quite profitable, though having a less easy time growing other and new markets. They are using their present fuel hedges to establish and build their market. The fuel hedges didn't come for free either, SWA paid a lot of money for them plus there are tax angles. In summary, SWA would still have been profitable without the fuel hedges using a different strategy or business plan as someone else stated.

The legacies would have been profitable, too, if they flew their asess off like we do. Do you ever see a 20 min. turn at Delta or Northwest? Or see a Continental 737 board in just 15 minutes?

The legacies would have been profitable, too, if their business model and corporate culture was like ours. Have you ever seen a business passenger storm away and say he'll never set foot on a Southwest jet again?

The legacies would have been profitable, too, if they had one narrowbody fleet type and one widebody fleet type. Perhaps.

There are many factors for our profitability. Honing in on one is simplistic but fails to tell the whole picture.

SWA Commuting
 

Question for the SWA's pilots.

I am hoping to get my type rating in April and then be blessed by the SWA's family. Can you tell me how easy or difficult it would be for a new hire to:
1) commute from DTW to MDW
2) Is it likely that a new hire could obtain MDW as his domicile?

Thank you for your help.

I used to watch that show airline. It was mostly about people being upset for one reason or another. Mostly because people were to fat to fit in one seat. Or the overbooking of the flight thing.

Have you listened to the SWA Podcast? It might offer insight to new hire domiciles.

http://airlinepilotcentral.libsyn.co...?post_id=42413