SWA profits WITHOUT fuel hedging.
08-07-2006 | 08:27 PM
#51
Gets Weekends Off
Joined: Feb 2005
Posts: 242
Likes: 0
From: Lazy-boy Captain
A little funny for my pal SWACapt.
This is a copy of SWACapt. checklist.
1)..........Gear Up
2)..........Shut Up
This document is not to be used
except when SWA Capt is in charge!
There you go Iron Hand!
1)..........Gear Up
2)..........Shut Up
This document is not to be used
except when SWA Capt is in charge!
There you go Iron Hand!
08-08-2006 | 04:28 AM
#52
Gets Weekends Off
Joined: Sep 2005
Posts: 157
Likes: 0
From: Retired
av8r4aa and swacapt
Originally Posted by SWAcapt
Oh, I get it now Av8r4aa. Thanks for setting me straight. You think we should all seek the lowest common denominator like you and not give a crap about our jobs. We should just be as inefficient as we can so that when our company looses millions and cuts our pay we can whine about it. You are pathetic and aparently get what you deserve. You seemed to miss the part where I give credit to about 90% of our pilot force. I am one of the reasons that Southwest is profitable along with a bunch of other guys like me. I am not an anomally over here, I am a product of the hiring process. We hire hard working people that 'get it' and you apparently don't. You seem very angry with the fact that I and my fellow pilots are concerned with company profitability. In fact you just seem plain angry. You are pretty transparrent. It's the 'ol SWA has destroyed the industry thing again. Perhaps you should focus some of your negative energy on improving your company and be less concerned with mine. Hope you are able to get over your anger issues for he sake of those that might have to fly with you. Best wishes to you
I think you two should go out behind the hanger and duke it out!
Sticks and Stones.
Grow UP!!!!!
08-08-2006 | 11:48 AM
#54
Gets Weekends Off
Joined: Oct 2005
Posts: 955
Likes: 0
From: 737 Right
Wow, I didn't realize so many pilots (or aviation enthusiasts) are trained to interpret financial statements.
For what it's worth, some food for thought, then my opinion in this matter:
Net income derived from the bottom line of an income statement may not be the best indicator of a company's financial viability. Yes, obviously a company needs to "make money" - but the income statement and balance sheet are the results of accrual basis accounting. One of the main purposes of accrual basis accounting is to spread certain types of expenses and gains across a longer time period. This creates a little grey area when accountants are trying to determine the value of certain assets.... such as the derivative financial instruments that SWA uses for their fuel hedges. That being said, the financial statement reader must understand that this information should be used in conjunction with other financial statements - namely, the Statement of Cash Flows.
Cash keeps a business running... and a businesses ability to generate cash from operating and investing activities is very important. When the information taken from annual and quarterly results is interpreted correctly, the reader may have a better understand of the firm's ability to meet obligations and continue as a going concern. If I remember correctly, the results as depicted on a statement of cash flows do not include gains or losses from activities such as fuel hedging.
For the quarter ended June 2006, an $8MM cash decrease is shown, however for the year ended 2005 a cash increase of $1.2B is shown. What to think of this? The Q2 2006 numbers appear to be the results of significant capital investment funded by cash from operations and cash reserves.
I welcome rebuttals and corrections to my information. However, based on my interpretation, I cannot see why SWA shouldn't be able to continue to stay in the black (as computed by both accrual and cash accounting) despite rising fuel costs - especially when you consider the company's history of improving operational efficiencies.
Statements like "when SWA's hedges run out they won't be able to make a profit anymore because they will have to raise fares like every other carrier" seem a little narrow minded to me. SWA has many advantages in cost - not just cheap fuel. Legacy carriers will have to match SWA's excellence in resource allocation, operational efficiencies, and customer loyalty before they are any real threat.
For what it's worth, some food for thought, then my opinion in this matter:
Net income derived from the bottom line of an income statement may not be the best indicator of a company's financial viability. Yes, obviously a company needs to "make money" - but the income statement and balance sheet are the results of accrual basis accounting. One of the main purposes of accrual basis accounting is to spread certain types of expenses and gains across a longer time period. This creates a little grey area when accountants are trying to determine the value of certain assets.... such as the derivative financial instruments that SWA uses for their fuel hedges. That being said, the financial statement reader must understand that this information should be used in conjunction with other financial statements - namely, the Statement of Cash Flows.
Cash keeps a business running... and a businesses ability to generate cash from operating and investing activities is very important. When the information taken from annual and quarterly results is interpreted correctly, the reader may have a better understand of the firm's ability to meet obligations and continue as a going concern. If I remember correctly, the results as depicted on a statement of cash flows do not include gains or losses from activities such as fuel hedging.
For the quarter ended June 2006, an $8MM cash decrease is shown, however for the year ended 2005 a cash increase of $1.2B is shown. What to think of this? The Q2 2006 numbers appear to be the results of significant capital investment funded by cash from operations and cash reserves.
I welcome rebuttals and corrections to my information. However, based on my interpretation, I cannot see why SWA shouldn't be able to continue to stay in the black (as computed by both accrual and cash accounting) despite rising fuel costs - especially when you consider the company's history of improving operational efficiencies.
Statements like "when SWA's hedges run out they won't be able to make a profit anymore because they will have to raise fares like every other carrier" seem a little narrow minded to me. SWA has many advantages in cost - not just cheap fuel. Legacy carriers will have to match SWA's excellence in resource allocation, operational efficiencies, and customer loyalty before they are any real threat.
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