Southwest profits spike...
 

Only SWA, who flies only 737's and has numerous Max deliveries stalled, could still make money

https://wtop.com/business-finance/20...ax-groundings/

Heck ya! Looks like the same profit sharing is expected as last year, but with more employees.

There's no doubt that the industry "benefited" via higher fares due to limited capacity during the unplanned MAX parking.

SWA will have to show Boeing/court that it could have made MORE money had the MAX been flying the whole summer...... that may be more of a challenge.

While the profit-sharing percentage may very well be what it was last year, there will be a number of pilots who will make less simply because they flew less due to their lines being reduced from say 98 to 87 TFP, fewer if any JA's and fewer reroutes, especially if they're on the top end of the pay scale.

I'm not a bean counter, but... how do you quantify the loss of market share and ceding markets due to no aircraft through no fault of your own? That's been all over the news.

I'm not saying it's not having an effect on their original strategy, but the resulting external constraint on domestic service in the middle of a well-off economy with low oil prices has produced an environment where all the airlines are achieving much higher revenues than even they imagined two years ago.

Bean counters will have to go to court to convince a jury (or at least Boeing) that had they had access to all this capacity they would have made even more money (than historic 3rd Q profits) despite much more capacity being introduced domestically from SWA/UAL/AMR with the MAX.

Ironically, since deregulation, many an airline has driven itself into or towards bankruptcy in the pursuit of the almighty market share.

You may not wanna include SWA in this figure... UAL and AMR can switch to other types. SWA cannot as we bet our future existence on the MAX. That’s why the debate goes on whether it’s wise to remain a single type fleet.

SWA also hired more workers in anticipation of this expansion and increasing its market share, and it now has to absorb the cost of doing so, in addition to not having aircraft to do what it had planned through no fault of their own.

I don’t see this going in front of a jury. This will get settled out of court.

Isn’t AMR gone?

I was including AA and UAL because it did curtail some of their domestic expansion plans over the past year as well. Maybe not to the extent of SWA, but it did trim their Domestic ASMs.

That in turn helped the whole industry turn record 3Q profits as people ponied up and bought remaining seats at a slight premium over what would have been offered.

My whole comment was that SWA will have to prove to someone (probably not a jury but at least BAs counsel) that it would have made MORE profit had the max been an amazing success. That’s going to be a challenge considering how much profit they made despite the MAXs actual disappointment.

Not flooding the market with extra capacity has helped the industry, even SWA make some nice profits.

SWAPA may make that case more convincingly. Maybe that will set precedent for the company.