av8orwalk
Topic Author
Posts: 129
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WN 1Q Profit Up 266% To $451M

Thu Apr 23, 2015 12:38 pm

These are incredible numbers from WN! Congrats on such a strong start to the year.

http://money.cnn.com/news/newsfeeds/articles/prnewswire/DA88058.htm

Cheers!
Drew MCO
The safest place to be in an airplane crash is on the ground.
 
tortugamon
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RE: WN 1Q Profit Up 266% To $451M

Thu Apr 23, 2015 12:50 pm

UA booked $582 million in profit to book its most profitable Q1 in history. $1 Billion more than last year.
DL booked $746 million as well which was 3 times what they earned last year.

These US airlines seem to be turning around their finances and shoring up their balance sheets (finally!). I have been reviewing their quarterly reports and capacity seems to be consistent which is opposite from what I have been reading in the media.

I don't think we have B6 or AA numbers yet.

AS has the following:

"Cheaper fuel helped Alaska Air Group (ALK) post a first quarter profit of $149 million, or $1.12 per share, counting special items, during the first three months of the year.

That was a significant increase over the $94 million profit, or 68 cents per share, the airline brought in during the first quarter of 2014."

tortugamon

edit: added AS

[Edited 2015-04-23 06:45:30]
 
MVAair
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RE: WN 1Q Profit Up 266% To $451M

Thu Apr 23, 2015 1:36 pm

The only problem I see is wages were up 11% on a 6% increase in revenue. That isnt sustainable. Fuel was down 33% and overall costs were down 8%.
 
BD338
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RE: WN 1Q Profit Up 266% To $451M

Thu Apr 23, 2015 1:49 pm

They saved $450M in fuel in Q1, a huge benefit to the bottom line. Underlying unit costs ex-fuel were consistent year on year, Passenger revenues and ASM's grew in parallel. Strip out the fuel benefit, which all airlines are benefiting from and the underlying performance is good but hardly earth shattering. Markets in early trading are only ticking up around 1% on a stock off around 10% from its recent high. I think I might take my LUV profits now and sell, the stock has done well over the past 2 years.
 
ScottB
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RE: WN 1Q Profit Up 266% To $451M

Thu Apr 23, 2015 5:19 pm

Quoting MVAair (Reply 2):
The only problem I see is wages were up 11% on a 6% increase in revenue. That isnt sustainable. Fuel was down 33% and overall costs were down 8%.

I think the increase in wages outpacing revenue is only concerning if viewed in a vacuum without considering the decline in fuel costs; I expect that the company lowered fares marginally in order to retain traffic which might have switched to competitors or other modes of transportation (i.e. driving becomes more attractive as gas prices decline).

And in this case, they outperformed UA by a wide margin, which recorded a decline in revenue of 1% on a 6.9% increase in employee compensation.

Keep in mind as well that $97 million of LUV's increase in employee pay is due to a much larger profit sharing payout; absent profit sharing impacts, salaries, wages & benefits were only up 3.8% year-over-year.

Quoting tortugamon (Reply 1):
UA booked $582 million in profit to book its most profitable Q1 in history. $1 Billion more than last year.

That's a huge improvement for UA, but they're still underperforming by a wide margin given that WN's Q1 operating profit of $780 million beat UA's operating profit of $741 million -- and WN did it on 51% of UA's operating revenue. The difference in net profit essentially comes from the fact that UA pays virtually no income tax thanks to over a decade of enormous losses.
 
MVAair
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RE: WN 1Q Profit Up 266% To $451M

Thu Apr 23, 2015 6:58 pm

Quoting ScottB (Reply 4):
Keep in mind as well that $97 million of LUV's increase in employee pay is due to a much larger profit sharing payout; absent profit sharing impacts, salaries, wages & benefits were only up 3.8% year-over-year.

That's a good point.
 
dc10lover
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RE: WN 1Q Profit Up 266% To $451M

Thu Apr 23, 2015 7:12 pm

Wonder about the profits for Summer 2015.
Why endure the nightmare and congestion of LAX when BUR, LGB, ONT & SNA is so much easier to fly in and out of. Same with OAK & SJC when it comes to SFO.
 
tortugamon
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RE: WN 1Q Profit Up 266% To $451M

Thu Apr 23, 2015 7:40 pm

Quoting ScottB (Reply 4):

Great points Scott.

tortugamon
 
PlanesNTrains
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RE: WN 1Q Profit Up 266% To $451M

Thu Apr 23, 2015 10:34 pm

Quoting tortugamon (Reply 1):
AS has the following:

"Cheaper fuel helped Alaska Air Group (ALK) post a first quarter profit of $149 million, or $1.12 per share, counting special items, during the first three months of the year.

That was a significant increase over the $94 million profit, or 68 cents per share, the airline brought in during the first quarter of 2014."

It must be from those "new markets" listed in today's ATW Online news:

"Tilden told analysts and reporters: “We added three new markets in the first quarter, including Seattle to Dulles and San Diego-Tacoma."

San Diego-Tacoma, huh..... interesting.  

-Dave
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
ericm2031
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RE: WN 1Q Profit Up 266% To $451M

Thu Apr 23, 2015 10:41 pm

Didn't the recent new contract for customer service agents happen recently too? That might push labor costs up too with the signing bonuses and for a group that big, the increase in hourly wage would probably have an impact year over year until a full year has passed. Just an idea, might not be true.
 
caleb1
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RE: WN 1Q Profit Up 266% To $451M

Fri Apr 24, 2015 2:48 am

Record profits and yet WN has still not found a way to nickel and dime their customers under the guise of "ancillary" revenue. They've even managed to find a way to continue to offer free inflight snacks. How are they able to do this and still remain profitable when other large legacy carriers can't or won't do the same? I applaud WN for their efforts to offer a quality inflight experience yet still manage to stay on the high road in terms of customer care. They may not be perfect, but they are light years ahead of the competition. Way to go Southwest!
 
737tdi
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RE: WN 1Q Profit Up 266% To $451M

Fri Apr 24, 2015 6:39 am

Quoting MVAair (Reply 2):
The only problem I see is wages were up 11% on a 6% increase in revenue. That isnt sustainable. Fuel was down 33% and overall costs were down 8%.

Where in the world did you see that wages were up 11%??? That is just a stupid lie or misinformation. The rampers haven't gotten it, the mechs. we sure haven't gotten it. The mechs. we sure haven't gotten it. Where is that figure from. No where I guess. Back up your numbers my friend.
 
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SANFan
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RE: WN 1Q Profit Up 266% To $451M

Fri Apr 24, 2015 7:16 am

Quoting PlanesNTrains (Reply 8):
“We added three new markets in the first quarter, including Seattle to Dulles and San Diego-Tacoma."

That's cute! "San Diego to Kona" sure could be misunderstood as "San Diego Tacoma" if someone wasn't paying close attention.

 

bb
 
jbflyguy84
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RE: WN 1Q Profit Up 266% To $451M

Fri Apr 24, 2015 8:21 am

Quoting 737tdi (Reply 11):
Where in the world did you see that wages were up 11%??? That is just a stupid lie or misinformation. The rampers haven't gotten it, the mechs. we sure haven't gotten it. The mechs. we sure haven't gotten it. Where is that figure from. No where I guess. Back up your numbers my friend.

Take a read of the article, my friend, it quite clearly shows the 11.3% increase in staff costs... note that it is not saying an 11% increase in salaries, just an overall increase in staff costs.
 
737tanker
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RE: WN 1Q Profit Up 266% To $451M

Fri Apr 24, 2015 11:39 am

The only way that I can see that staff costs are up by over 11% is that all of the former AirTran employees are now on the Southwest payroll. Last year they were still on the AirTran payroll.
 
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einsteinboricua
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RE: WN 1Q Profit Up 266% To $451M

Fri Apr 24, 2015 12:06 pm

Dang...I should have bought WN stock when I had the chance. Well done WN!
"You haven't seen a tree until you've seen its shadow from the sky."
 
MisterScott
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RE: WN 1Q Profit Up 266% To $451M

Fri Apr 24, 2015 12:36 pm

Well the load factors from DAL have to be helping. I have been running DAL to DEN frequently and I struggle to remember a flight that was no at least 85-90% full with many being 100% including the new 738's. They are also charging handsomely for some of the fares. I had a delay last week DEN to DAL because of a pilot change. We were late about 15 minutes. They sent me a nice email that they were adding 1500 points to my Rapid Rewards account because of the delay. Sent the email to my buddy who is an AA fanboy and he was completely floored by what WN did. He said he waits longer for gates at DFW....
 
DXBDFWHGA
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RE: WN 1Q Profit Up 266% To $451M

Fri Apr 24, 2015 12:47 pm

Congratulations to WN the best run airline in the US.!
 
dragonflyer
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RE: WN 1Q Profit Up 266% To $451M

Fri Apr 24, 2015 3:17 pm

Quoting jbflyguy84 (Reply 13):
Take a read of the article, my friend, it quite clearly shows the 11.3% increase in staff costs... note that it is not saying an 11% increase in salaries, just an overall increase in staff costs.
Quoting 737tdi (Reply 11):
Where in the world did you see that wages were up 11%??? That is just a stupid lie or misinformation. The rampers haven't gotten it, the mechs. we sure haven't gotten it. The mechs. we sure haven't gotten it. Where is that figure from. No where I guess. Back up your numbers my friend.

I think jbflyguy84 is looking only at the numbers, but that 11% increase is under "Wages, Salaries, and Benefits" which also includes...Profit Sharing! So including that, then yeah, sure...not including that, well, I haven't had a raise or COLA in 5 years. Just saying'.

I think this is more telling:

"Excluding fuel and oil expense and special items in both periods, first quarter 2015 operating costs increased 5.8 percent from first quarter 2014, largely due to the first quarter 2015 profitsharing expense of $126 million, compared with $29 million in first quarter 2014. Excluding fuel and oil expense, special items, and profitsharing in both periods, first quarter 2015 operating costs increased 2.1 percent from first quarter 2014, and decreased 3.6 percent on a unit basis."

Operating costs are DECREASING when Profit Sharing is excluded, on a unit basis!

Also, did anybody notice the ROIC of 25.6%? Now about those pay raises.... (cricket, cricket)

At least I'm a shareholder, I guess.   
We earn our wings every day...Comments/opinions are my own and do not reflect my employer.
 
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DarkSnowyNight
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RE: WN 1Q Profit Up 266% To $451M

Fri Apr 24, 2015 4:29 pm

Quoting tortugamon (Reply 1):

UA booked $582 million in profit to book its most profitable Q1 in history. $1 Billion more than last year.
DL booked $746 million as well which was 3 times what they earned last year.

Willing to bet you a shiny new box of donuts there are already threads for those...

Quoting DC10LOVER (Reply 6):
Wonder about the profits for Summer 2015.

Good question. Traditionally, WN is able to show pretty strong returns during months otherwise characterized by high-revenue, but high operational costs. I'm not really seeing anything to be concerned about for this year, but we never know until we know, huh?

Quoting jbflyguy84 (Reply 13):
Take a read of the article, my friend, it quite clearly shows the 11.3% increase in staff costs... note that it is not saying an 11% increase in salaries, just an overall increase in staff costs.

There has been a lot of hiring lately, yes.

Quoting 737tdi (Reply 11):
Where in the world did you see that wages were up 11%??? That is just a stupid lie or misinformation. The rampers haven't gotten it, the mechs. we sure haven't gotten it. The mechs. we sure haven't gotten it. Where is that figure from. No where I guess. Back up your numbers my friend.

I am curious though... Is there a new CBA in sight for you guys?

Quoting DXBDFWHGA (Reply 17):
Congratulations to WN the best run airline in the US.!

Definitely one of the good ones, isn't it?

Quoting dragonflyer (Reply 18):
So including that, then yeah, sure...not including that, well, I haven't had a raise or COLA in 5 years. Just saying'.

Hopefully you're topped out if that's the case (and also not in SFO, lol).
"Nous ne sommes pas infectés. Il n'y a pas d'infection ici..."
 
737tdi
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RE: WN 1Q Profit Up 266% To $451M

Fri Apr 24, 2015 4:52 pm

Quoting DarkSnowyNight (Reply 19):
I am curious though... Is there a new CBA in sight for you guys?

I have always said that discussing negotiations on here is wrong and I will stand by that. I will say, we aren't even close.
 
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DarkSnowyNight
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RE: WN 1Q Profit Up 266% To $451M

Fri Apr 24, 2015 5:09 pm

Quoting 737tdi (Reply 20):

Oh, I understand all that and really wasn't asking how it's going. Just if there was one in sight, based on your previous comment. Good Luck.
"Nous ne sommes pas infectés. Il n'y a pas d'infection ici..."
 
737tdi
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RE: WN 1Q Profit Up 266% To $451M

Sat Apr 25, 2015 3:03 am

Quoting DarkSnowyNight (Reply 21):
Oh, I understand all that and really wasn't asking how it's going. Just if there was one in sight, based on your previous comment. Good Luck.

Sorry, I was not trying or intending to be abrupt. I just hate company/contract talks on here by employees of said airlines. It is not productive and makes me very uncomfortable when I read it. If it gets bad enough to complain on Anet. then maybe you should find a different career. JMO.
 
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DarkSnowyNight
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RE: WN 1Q Profit Up 266% To $451M

Sat Apr 25, 2015 3:55 am

Quoting 737tdi (Reply 22):

No worries. And I couldn't agree more. I'm not always happy with my gig, but keeping my resume current and circulated is more satisfying than bitching about it, public or otherwise.

In any case, I've worked a lot of projects with your company over the years and I'm constantly impressed with how above average professional you guys are. And part of that is from the notion that even if things aren't always awesome there, you guys never whine about it. So keep up the awesome work and hopefully fatter times ahead.
"Nous ne sommes pas infectés. Il n'y a pas d'infection ici..."
 
Silver1SWA
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RE: WN 1Q Profit Up 266% To $451M

Sat Apr 25, 2015 5:41 am

Quoting 737tdi (Reply 22):
Sorry, I was not trying or intending to be abrupt. I just hate company/contract talks on here by employees of said airlines. It is not productive and makes me very uncomfortable when I read it. If it gets bad enough to complain on Anet. then maybe you should find a different career. JMO.

Getting frustrated and complaining about things that affect your job life and personal life can be a result of caring. You're right that a public forum isn't the place to discuss things, but I don't agree that if one isn't happy with how things are going that they should automatically just quit.

There are things that just make my blood boil if I dwell on them but I show up and do my job and I give it my best. That's all I can do.

[Edited 2015-04-24 22:47:01]
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
slcdeltarumd11
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RE: WN 1Q Profit Up 266% To $451M

Sat Apr 25, 2015 5:48 am

Lets be honest here less competition and higher fares are a HUGE part of these results. Its not purely lower fuel.
 
ericm2031
Posts: 1269
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RE: WN 1Q Profit Up 266% To $451M

Sat Apr 25, 2015 6:49 am

Quoting MisterScott (Reply 16):

Well the load factors from DAL have to be helping. I have been running DAL to DEN frequently and I struggle to remember a flight that was no at least 85-90% full with many being 100% including the new 738's. They are also charging handsomely for some of the fares. I had a delay last week DEN to DAL because of a pilot change. We were late about 15 minutes. They sent me a nice email that they were adding 1500 points to my Rapid Rewards account because of the delay. Sent the email to my buddy who is an AA fanboy and he was completely floored by what WN did. He said he waits longer for gates at DFW....

I knew AS did this but I'm glad to see that WN is doing this as well. I'm sure WN has even better success with it as it has to collect email addresses from everybody as they don't use 3rd party sites. That's one of the hardest part for the other airlines...trying to find contact information for a passenger for a reservation made through a 3rd party booking site.
 
MVAair
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RE: WN 1Q Profit Up 266% To $451M

Sun Apr 26, 2015 5:50 pm

Quoting 737tdi (Reply 11):

It is in the article. Very clearly written.
As someone mentioned it is the result of profit sharing. Also I'd guess more employees.

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