Herkulesdrvr

No I don't work for JB? My statement about industry leading wages is true isn't it? SWA raises you to a higher level, that is just a fact.

SaltyDog

Well, know that you know I'm "stupid" I'll go back to the basics, They have many strategies to ensure a high probability of success and profit. Certainly the magnitude of the profits relied on fuel hedging. However, keeping apples to apples for clarity, if WN makes $100 on their system operations, and because of fuel hedging, it is now $400, the fact remains that the company made a profit without fuel hedges, albeit lower (83% lower by your figures). However, this strategy of profitabilty predates fuel hedging (same type aircraft, point to point, etc). That is fact. Is it a long term strategy now? Absolutely and they have so publicly stated.
Also, don't you see the irony of stating that the (non fuel) WN CASM is "surprisingly close to several of the post bankruptcy legacies"? Wow,you knock a company that pays pretty well, hasn't driven themselves into bankruptcy to lower CASM. Again, Wow.
Would you not agree that going into bankruptcy is the fault of management and screws alot of folks? Would you not agree that bankruptcy in the airline business is a completely unfair competitor? Well they are competing unfairly using other folks to pay their bills thus causing further decline in our profession.
Seems contrary to me that as so many of us struggle in this profession that we knock one of the few companies that can make a profit with or without fuel hedges. Oh well, call me stupid.<g>

SaltyDog

Look at the fast food industry, they packaged the meals to simplify pricing and they are extraordinarily profitable and successful. They also raised the prices of the sandwich. The reason the airlines charging extra fees is looking good is because people need them (gotta have luggage) . Consumers are not stupid like me, they will compare the final bill, compare to an airline that is not ala carte and go with the product that serves their needs. Expect WN will do well by NOT charging ala carte and still raise prices like the fast food industry model selling packaged meals.

Sike

This discussion is somewhat irrelevant. The only reason oil is below $75 is because the economy is in the gutter. As soon as the economy bounces back (I know I'm a bit optimistic here), oil will return to $90-$100+ and Southwest will have re-hedged their fuel at $60 and will have the advantage again.

Dash8Pilot

This thread has only served to reinforce my belief that reading a balance sheet, income statement, and cash flow statement should be mandatory on airline pilot interviews.

Eric Stratton

yes it is true but it is also true of the reverse. southwest will help raise the bar from it's current level while virgin america will do the opposite.

it seemed like you were saying one was true but the other wasn't. must have misread your comment.

DelDah Capt

Salty dog,

Hopefully you know that I wasn't calling you stupid....I was making a word play on the popular political expression "It's the economy, stupid"

With that said, I disagree with much of what you said

You said: And what I'm telling you is that Southwest in many cases over the last several years has not made that $100 profit. Simply put, they have been losing money flying passengers in number of recent quarters, however, they show profits from the settlement of fuel contracts (as I showed in the quotes from their Q2 2008 and Q4 2007 results....and there are others preceeding that)

Furthermore, I'm not congratulating other airlines for trimming their CASMs through bankruptcy. As someone who took a 46% paycut and lost their retirement in bankrupcy, I'm no fan of the process. However, there are folks who think that SWA has a huge cost advantage over other airlines but in fact, their non fuel CASM is about 7 cents which is right in line with other airlines though clearly their overall CASM is better than other airlines, again due to their hedging, not some mystical airline secret. That CASM advantage will erode as their current fuel contracts expire. There's certainly nothing to prevent them from hedging in the future, but the fact remains that they haven't made any significant hedging moves in 2 years.

I'm not knocking Southwest, I think they made some incredibly smart moves in the past and their cash position leaves them far better off to weather the present econmic storm, but even their own CEO Gary Kelly has been quoted numerous times recently saying that they face some real challenges. I also am trying to debunk the myth that many seem to have that they are profitable because they have happy employees or because they still give out free peanuts. Not that there's anything wrong with happy employees, but there are three reasons for SWA's profits in recent years:

1) Their hedging program
2) Their hedging program
3) ...and their hedging program

ToiletDuck

Wait wait wait. So why hasn't this been deleted, the thread locked, and DelDah banned for two weeks?

SaltyDog

TD,
<g> Cause Del Dah Capt and me are both grown ups and just chatting along, no personal name calling. We are happy to discourse. Just wish I could be drinking some brews with lots of these folks like Del Dah and Ewr, just that we have different layovers <g>

quimby

WOW! CAL has 777's!

ewrbasedpilot, you're my hero.

Please show the crowd proof of where a SWA employee said "we'll never have an unprofitable quarter"

<waiting>