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av8orwalk
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Southwest Reports Record 1Q Earnings

Thu Apr 24, 2014 12:30 pm

Record 1Q profit, excluding special items, of $126M up from $53M 1Q13.

http://www.marketwatch.com/story/sou...it-2014-04-24?reflink=MW_news_stmp

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unmlobo
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RE: Southwest Reports Record 1Q Earnings

Thu Apr 24, 2014 2:15 pm

Great job Southwest!
Went to school in ABQ, former airline employee. Now living in Dallas
 
AWACSooner
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RE: Southwest Reports Record 1Q Earnings

Thu Apr 24, 2014 2:37 pm

Imagine how much $$ they'd make if they started charging for checked baggage/carry-ons/seat assignments/boarding passes.  

It's refreshing to see a carrier NOT charge for them and still make a profit...and prove the rest of the LCC/ULCC/Legacies that you don't have to treat the customer like a wallet to nickel and dime.
 
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DarkSnowyNight
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RE: Southwest Reports Record 1Q Earnings

Thu Apr 24, 2014 2:47 pm

Quoting AWACSooner (Reply 2):

It's refreshing to see a carrier NOT charge for them and still make a profit...and prove the rest of the LCC/ULCC/Legacies that you don't have to treat the customer like a wallet to nickel and dime.

Or go a few years not paying their bills and still sink back into loss making habits anyway. We get excited, for some reason, when legacies peak out their boom/bust cycles, but I really do believe this consistent success with a product people actually want is the real deal here.

Congratulations on another well earned quarter, WN team.
"Nous ne sommes pas infectés. Il n'y a pas d'infection ici..."
 
philabos
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RE: Southwest Reports Record 1Q Earnings

Thu Apr 24, 2014 8:02 pm

Think how many customers they would have lost if they DID start charging for bags.
 
QANTAS747-438
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RE: Southwest Reports Record 1Q Earnings

Thu Apr 24, 2014 9:19 pm

Oh jeez.... can't we go ONE earnings report without bringing up the "checked bags" thing?
My posts/replies are strictly my opinion and not that of any company, organization, or Southwest Airlines.
 
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TVNWZ
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RE: Southwest Reports Record 1Q Earnings

Thu Apr 24, 2014 9:50 pm

Quoting philabos (Reply 4):
Think how many customers they would have lost if they DID start charging for bags.

Well, if they kept the total trip price lower than the competition---none.

Quoting philabos (Reply 4):
Oh jeez.... can't we go ONE earnings report without bringing up the "checked bags" thing?

Nope
 
wjcandee
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RE: Southwest Reports Record 1Q Earnings

Fri Apr 25, 2014 5:00 am

Looks like their plan to take a low-cost competitor out of the marketplace is paying off.
 
airplaneboy
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RE: Southwest Reports Record 1Q Earnings

Sat Apr 26, 2014 11:52 pm

How awesome that WN has been able to be consistently profitable without bankruptcy- while still paying their employees livable wages, and while also not nickel and diming customers (2 free checked bags, no change fees, etc.) Seems like a.net fans don't acknowledge WN as much as they deserve.
 
MaverickM11
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RE: Southwest Reports Record 1Q Earnings

Sat Apr 26, 2014 11:58 pm

Quoting AWACSooner (Reply 2):
.and prove the rest of the LCC/ULCC/Legacies that you don't have to treat the customer like a wallet to nickel and dime.

I think WN had the weakest operating margin of them all, HA/UA aside...  
I don't take responsibility at all
 
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lightsaber
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RE: Southwest Reports Record 1Q Earnings

Sun Apr 27, 2014 12:35 am

Quoting AWACSooner (Reply 2):

Imagine how much $$ they'd make if they started charging for checked baggage/carry-ons/seat assignments/boarding passes.
Quoting QANTAS747-438 (Reply 5):

Oh jeez.... can't we go ONE earnings report without bringing up the "checked bags" thing?

     

Quoting MaverickM11 (Reply 9):
I think WN had the weakest operating margin of them all, HA/UA aside... 

Here is a comparison (UAUA and AMR still need to report and won't until their numbers are better):
http://www.wikinvest.com/stock/South...ompany_(LUV)/Data/Operating_Margin

B6 has better margins than WN also without bag fees.

Quoting airplaneboy (Reply 8):
Seems like a.net fans don't acknowledge WN as much as they deserve.

I appreciate them. But if they keep having such low margins, they're done in two decades. Due to search engine and tax systems, I think both B6 and WN will have to charge for bags.  
How I wish there was a search engine that included bag fees as an option... (*and* the option to price sans a bag)

Lightsaber
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airplaneboy
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RE: Southwest Reports Record 1Q Earnings

Sun Apr 27, 2014 4:28 am

A 14% ROIC is still impressive nonetheless while maintaining low debt. The point is SWA hasn't had to go through bankruptcy to consistently achieve profitability. How many airlines have operated profitably for 40 plus consecutive years? Previously critics would argue that WN used fuel hedges as an *unfair* advantage. Look who's hedging fuel now? Heck, DL even bought a refinery. SWA has, and continues to operate in a level playing field. Don't think for one second that any of the major legacy carriers would still be around were it not for the chapter 11 bankruptcy code.
 
737tdi
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RE: Southwest Reports Record 1Q Earnings

Sun Apr 27, 2014 5:31 am

Quoting lightsaber (Reply 10):
But if they keep having such low margins, they're done in two decades

Really, how rude. AA/NW/DL/CO/ can declare bankruptcy and survive, not having to pay full price on their debt. That sure makes the bottom line look better does it not? I think you are way off course with your prediction. I see many other airlines diving before WN. You can only survive so long with an outdated plan. WN continues to massage it's flight schedule, flight planning, and we will not let it fail. So there you go.

Quoting airplaneboy (Reply 11):
A 14% ROIC is still impressive nonetheless while maintaining low debt. The point is SWA hasn't had to go through bankruptcy to consistently achieve profitability.

There you go. I believe our target was 15%. That is close. And it might be hit next quarter? You guys that think you are the king of the world??? You are not. Domestic you are so far behind. Slam all you want but your a.. is being handed to you by the LCCs and the ULCCs. Sorry it is just the way it is.
 
TUSDawg23
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RE: Southwest Reports Record 1Q Earnings

Sun Apr 27, 2014 6:13 am

Great news for WN. As stated on her numerous times, they have turbulent times ahead in dealing with their labor costs, but it's going to take quite an iceberg to bring the ship down for WN. They offer a consistent product that many business travelers prefer and remain loyal to. The operational performance needs to improve, but I think with fleet growth coming to a halt this year, they will given some time to address some of those issues and continue to improve aircraft utilization along with it as stated by Mr. Kelly in his response to the 1Q results.
 
MaverickM11
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RE: Southwest Reports Record 1Q Earnings

Sun Apr 27, 2014 3:17 pm

Quoting airplaneboy (Reply 11):
The point is SWA hasn't had to go through bankruptcy to consistently achieve profitability

AS/NK/B6 haven't gone through bankruptcy.
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airplaneboy
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RE: Southwest Reports Record 1Q Earnings

Sun Apr 27, 2014 3:37 pm

Quoting MaverickM11 (Reply 14):
AS/NK/B6 haven't gone through bankruptcy.

Neither has Skywest or Republic Airways Holdings. B6 hasn't been around as long as WN, and their margins haven't been gangbusters for sometime. NK wasn't always so profitable prior to their acquisition by Indigo LLC, whose cash investments and new leadership helped turn around what was a struggling carrier. AS has been around longer than WN, but around the time of their fateful incident off the California coast, they were losing money- consistently. WN has been in business since 1971. They have posted a profit *every* year since 1973. That's the feat I'm talking about.
Gotta give credit where it's due. After 9-11, which airlines grew? Only B6 and WN did while all the majors filed for bankruptcy. These major legacy carriers wouldn't be around were it not for chapter 11. These are all facts that can be googled on the internet. There's a reason why SWA was, and continues to be studied in MBA programs around the world.
 
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lightsaber
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RE: Southwest Reports Record 1Q Earnings

Sun Apr 27, 2014 6:04 pm

Quoting 737tdi (Reply 12):
Really, how rude. AA/NW/DL/CO/ can declare bankruptcy and survive, not having to pay full price on their debt. That sure makes the bottom line look better does it not? I think you are way off course with your prediction. I see many other airlines diving before WN.

What's rude about pointing out WN must change strategy within 20 years to get up their margins?
I too see other airlines 'diving' before WN. I also see others growing quickly. e.g., B6, NK, and I see G4 transforming slowly to fill the niche WN used to.

20 years is a huge time in business. If WN doesn't change dramatically in that time... they would not only disappoint me, but join DL, UA, and AA in bankruptcy. They have a hundred ways to adapt and some the will. (e.g., international). Some I hope they don't (keep the cattle call, I like it).

It is a business, not a person. One should point out the faults and then the WN management decides if fixing such a fault has a business case. Often there isn't a business case. But WN's profit margin has been low for years which indicates a fundamental shift in their business they have not adapted to. Is it 'rude' to point out they are being silly keeping off the travel sites? I like WN, but I'll check Orbitz, another travel aggrigator, and another airline's web site to find the fares (sorry WN, while I like it, I have other favorites too). Since WN still doesn't fly to some of the airports I need to fly to/from (Canada, Hawaii, redeyes to major east coast cities, and to a lesser extent Mexico in particular), I'm just not in the habit of going to Southwest.com and that's ok. I'm displaying normal consumer behavior as I find it is only worth my time going to their website once or twice a year.

Quoting MaverickM11 (Reply 14):
AS/NK/B6 haven't gone through bankruptcy.

Has G4? They're really starting to fill much of the niche I used to think of as Southwests.

Quoting airplaneboy (Reply 15):
B6 hasn't been around as long as WN, and their margins haven't been gangbusters for sometime.

Look at my prior link on margins. B6 is doing far better than WN since they went a more premium approach and the transcontinental lie flat cabin should further help that. B6 serves the 'coasters' very well and that is a fast growing market.

And what's your point on ancient history on NK and AS? Those two airlines have markedly changed strategies and are now competitors WN should be looking over their shoulder at. WN has lower profit margins than AS/B6/NK/G4. WN's profit margins are low enough they are a 'low profit margin business' which means they are more vulnerable. It means they will not have the resources to expand quickly.

When I first joined a.net, it was a mime that every other airline had to adapt to WN. Well... times of changed. Its obvious WN isn't adapting fast enough. The four airlines they should be compared to have adapted significant in the last 5 years. The FL merger has shown how resistant to change WN can be. While change is coming... its slow. And slow change means giving competitors time to react.

LIghtsaber
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airliner371
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RE: Southwest Reports Record 1Q Earnings

Sun Apr 27, 2014 8:54 pm

Quoting lightsaber (Reply 16):
If WN doesn't change dramatically in that time...

Are you kidding me? Looks at the WN of 10 years ago and look at them now. Not many similarities...

Quoting lightsaber (Reply 16):
The FL merger has shown how resistant to change WN can be.

Resistant? How much change do you want them to go through? They have changed a lot through this acquisition and the change will continue.

Quoting lightsaber (Reply 16):
While change is coming... its slow.

Maybe that's your problem? It's not happening fast enough for you. Things take time. And your predictions of doom and gloom at WN are ridiculous and simply won't happen.
 
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lightsaber
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RE: Southwest Reports Record 1Q Earnings

Sun Apr 27, 2014 9:20 pm

Quoting airliner371 (Reply 17):
Maybe that's your problem? It's not happening fast enough for you. Things take time. And your predictions of doom and gloom at WN are ridiculous and simply won't happen.

Not happening fast enough for investors. Again, how is 20 years of warning 'Doom and Gloom?' That is just reality. WN must raise its profit margin and return on capitol. They can do it early and be a stronger company, do it later and survive, or not do it and go through Ch 11 in a few decades.

What I want doesn't matter. Its what the market wants.

And it is why WN is asking for contract changes and the labor relations aren't as ideal as in the past:
http://finance.yahoo.com/news/southw...once-brassy-upstart-023800228.html

From that link, a few snippets:
Still, the airline has failed to hit its long-standing goal of a 15% return on invested capital since 2000; it recently said it doesn't intend to grow overall until it does. Even with record profit last year, its return was 13%, up from 7% in 2012.

From 2007 through 2012, Southwest's cost to fly a seat one mile rose 42%—more than any other major U.S. airline, according to Massachusetts Institute of Technology data that adjust for flight distance.

Part of my opinion on WN is due to their computer system. I'm not young... but I expect far more from an airline computer system as do most people my age and younger. Yes WN is working on changing that... but late to the game.


Things take time, but I've seen a number of good (and some great) companies disappear because they didn't change fast enough. Have you read about 'Core strengths and Core rigidities?' How the very values that allowed a company to prosper keep it from changing fast enough?

Again, I like WN. But the market of today isn't the market of 5 years ago thanks to DL, NK, G4, AS, and B6. I firmly believe that AA will be added to that list in 5 years too. Only UA remains as an 'old school competitor' to WN. The kind of competition WN can run circles around. But a decade ago, WN was more nimble than 90% of the competition. Not so today.

Lightsaber
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MaverickM11
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RE: Southwest Reports Record 1Q Earnings

Mon Apr 28, 2014 1:54 am

Quoting airplaneboy (Reply 15):
B6 hasn't been around as long as WN, and their margins haven't been gangbusters for sometime.

B6 has been consistently 2x the operating margin of WN. To be fair most majors have been around twice as long as WN, and WN didn't have the rug pulled out from under them with deregulation.

Quoting airplaneboy (Reply 15):
These major legacy carriers wouldn't be around were it not for chapter 11.

True, again WN never had to deal with deregulation

Quoting lightsaber (Reply 16):
Has G4? They're really starting to fill much of the niche I used to think of as Southwests.

It went through bankruptcy when it was a nobody, maybe 2000?

Quoting airplaneboy (Reply 15):
They have posted a profit *every* year since 1973.

There's no question WN literally invented the LCC and has had an excellent record.
I don't take responsibility at all
 
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SEPilot
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RE: Southwest Reports Record 1Q Earnings

Mon Apr 28, 2014 3:13 am

Quoting AWACSooner (Reply 2):
Imagine how much $$ they'd make if they started charging for checked baggage/carry-ons/seat assignments/boarding passes

And then again, maybe they would lose a whole bunch of passengers who appreciate the fact that WN does NOT chaarge for these items. Clearly they have attracted a lot of business by their approach (me being one of them.)
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
737tdi
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RE: Southwest Reports Record 1Q Earnings

Mon Apr 28, 2014 5:38 am

Quoting lightsaber (Reply 18):
or not do it and go through Ch 11 in a few decades.

Well, I will be dead in a few decades, 2 probably. As far as the 15%, where is your money? Mine is surely not in an airline. Maybe I should be. What are you making on your bank account? I bet it isn't 14.2% return. Oh well who would have thunk it? Go on with your predictions but I would be United/Continental will be the first to die. I hate to say that because I know a lot of folks there and would hate to see their jobs lost. I sure hope I am wrong.
 
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lightsaber
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RE: Southwest Reports Record 1Q Earnings

Tue Apr 29, 2014 8:16 pm

Quoting 737tdi (Reply 21):
As far as the 15%, where is your money?

Mostly overseas growth stocks. I have been in airlines only a short time. I made good money, but decided I didn't like the downside potential.

But if I'm going to invest in other stocks, I'll invest in industries that return 14% more consistently as after re-investing by the company.

Quoting 737tdi (Reply 21):
I would be United/Continental will be the first to die.

They are being 'uniquely managed.'

Quoting 737tdi (Reply 21):
I hate to say that because I know a lot of folks there and would hate to see their jobs lost. I sure hope I am wrong.

I don't want anyone to lose a job. I had to switch companies at a time it sucked and that was very stressful. I'd rather all do well. Hence why I point out WN must increase their profit margin or watch competitors grow quicker. The first ten years won't matter, but if NK keeps growing at its current pace... it will be a very different market.

Lightsaber
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