SWA's CEO says his company may see its 1st loss in 71 quarters...

Even Southwest's outlook is uneasy for 4th quarter - USATODAY.com

 

And he has been saying this for the last several quarters. Heck it has been said well before Gary...Herb always preached the doom and gloom also. It is not new news. The pilots, FA's and mechanics are all in talks now. DO you think it may have a little to do with the doom and gloom? What a joke.

 

From the article:

"Nobody at Southwest Airlines intends to lose money in any quarter, but I can't guarantee you that that won't be the case," Kelly said.

And..

"The longer we go, the more concerned we get about the U.S. economy in 2009," he said.

And..

"Unless we see some good strong benefits from (competitors' cutbacks), I don't have a good strong argument for any growth next year," Kelly said.


I'm still trying to find where he talks about a Q4 loss.

S.B.

 

Southwest, as well as Alaska Airlines (ALK), reported better-than-expected profits Thursday — the only major U.S. airlines that made money in the second quarter. But in a conference call with securities analysts and reporters, Southwest CEO Gary Kelly acknowledged that Southwest may not earn its 71st-consecutive profit in the fourth quarter.

Find it yet?

 

Dont dem fool yu..

 

Thanks Shrek. That's...ah...embarassing. LOL. Shouldn't post late at night....

I'm still not buying it though. It will be interesting to read what everyone says when Southwest does post a Q4 profit. Also, if SWA loses money what will become of all the other airlines? SWA has $6bn in cash and owns 82% of their aircraft. They will be the last ones standing so be careful when you wish their demise.

S.B.

 

The gig is up for the oil speculaters. I'd be surpised if the 4th quarter was not profitable.

 

If they quit the $50 price war in DEN, perhaps they won't make a loss. I understand what they are trying to do, but such prices only hurt the industry as a whole.

 

Nothing will change until system capacity goes away. Too much capacity out there to sustain higher prices. It's got to come from somebody.

From January:

Could Southwest's run of profitability be coming to an end?

TodayswaBy posting a profit in 67 consecutive quarters, Southwest has set a standard for U.S. airlines. But is the airline's profitability streak be about to come to an end? The carrier is projected to turn a small profit during the current quarter, according to a Bloomberg News survey of Wall Street analysts, but Southwest CEO Gary Kelly warned rising fuel, labor, maintenance and airport costs are putting a squeeze on the carrier. "We are not planning for a loss,'' he said on a conference call with analysts and investors, according to Bloomberg News. "I'm not trying to alert or alarm anyone other than to say I can't give you a guarantee there won't be a loss in the first quarter."

"We would not have made money in the fourth quarter if not for fuel-hedging gains," the Fort Worth Star-Telegram (free registration) quotes Kelly as saying on the conference call. Kelly said the airline's fuel hedges boosted the carrier's bottom line by $300 million in the quarter. Still, January booking and traffic trends are optimistic enough that "we're not predicting a loss," Kelly said. "But at the same time, I'm not going to tell you that we're not at some risk there," he added. Kelly said that to avoid a loss, Southwest will have to find a way to boost revenue. That effort appears to be off to a good start, with Bloomberg writing "the airline flew more passengers at higher prices, helped by a new fare class aimed at attracting more business travelers."

It's been more than a decade since Southwest had an unprofitable quarter. The Dallas Morning News (free registration) notes Southwest "last posted a net loss in the first quarter of 1991, when the Iraq-Kuwait conflict drove up energy prices and prompted a drop in passenger traffic." Already, Southwest is responding to changing conditions, with the Morning News' Airline Biz blog writing that 2008 will be the carrier's "slowest-growing year in two decades." And if a loss does materialize for Southwest, the Star-Telegram says that "would be an ominous sign for the airline industry. … (Southwest) continued to report profits even in the years after 9-11, while rivals bled billions of dollars and many went bankrupt." Ironically, the talk of a possible loss comes as Southwest recorded its highest annual earnings ever in 2007, with a full-year profit of $645 million.

 

So if you look behind the curtain, both the tinman and the scarecrow told me that, airlines that fail as a result of fare wars usually turn to their employees to subsidize the battle..thus making our profession(als) paid less and less. What passenger pilots make today vs. back in the 60's is abysmal.

For those of you that say, why doesn't our dopey managment just raise fares $1...well, because for $51 one way, their airline will be listed 2nd on a web search and consequently lose business to the carrier listed at $50.

Don't hate the play-er, hate the game.

FF