SWA profit streak runs to 48 quarters

MikeD

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Southwest Airlines streak runs to 48 quarters

Associated Press

04/22/2003 12:00 AM


Low-fare carrier Southwest Airlines Co. reported its 48th consecutive profitable quarter Monday, even as its larger rivals racked up heavy losses.

Southwest's first-quarter earnings of $24 million, or 3 cents per share, were an increase of 14.3 percent from the year-ago period, the Dallas-based carrier said. In the first three months of 2002, Southwest's $21.4 million in net income was its lowest quarterly profit since fourth quarter 1994.

Revenue rose 7.5 percent to $1.35 billion from $1.26 billion.

The latest results were in line with estimates of analysts surveyed by Thomson First Call.

"Although our financial performance has been exceptional relative to the airline industry as a whole, Southwest, too, has been severely impacted by the lingering effects of the 2001 terrorist attacks and the war in Iraq," said James F. Parker, company vice chairman and chief executive officer. "Although our revenues were showing signs of recovery during fourth quarter 2002 and into first quarter 2003, those trends were disrupted.

"Since the war began, bookings for second quarter 2003 have softened further," he said. "Currently, we expect only modest revenue growth, if any, compared to last year's second quarter revenue of $1.47 billion, which included $36 million in additional revenue related to a reduction in estimated refunds and exchanges included in air traffic liability."

The last time Southwest Airlines lost money, in the first quarter of 1991, the United States was also at war with Iraq. Financial performance of the U.S. airline industry had begun suffering soon after the August 1990 invasion of Kuwait by Iraq.

Last week, Delta Air Lines reported a wider first-quarter loss and gave a gloomy forecast days after Continental and Northwest Airlines both reported hefty losses. Delta lost $466 million, while Continental lost $221 million in the first quarter and Northwest lost $396 million.
 
I've heard from a trustworthy source that SWA is likely to hire approx. 500 pilots during the next year. Maybe some good news for furloughees out there, and the rest of us, too!
 
I thought I heard someone say "niche airline", or something to that effect....
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Also - didn't somebody else say that SWA would fail and used the terms "mark my words"?
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I think it was all the angry airline execs, they hate SWA.
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Low-fare carrier Southwest Airlines Co. reported its 48th consecutive profitable quarter

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Only one word for this accomplishment: WOOHOO!
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I thought I heard someone say "niche airline", or something to that effect....
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They still are, guys. I've got nothing against Southwest or any of the other discounters, but I also realize that they cannot provide us with the transportation infrastructure we need in this country. That's the difference between me and the maroons on Wall Street.
 
Not every airline can provide service to every place on earth. There are many countries which can only be reached by one or two airlines in the world. And there are many cities and states in this country that can only be reached by ONE airline. So, does this mean that these airlines that provide the ONLY AVAILABLE SERVICE to such and such a city, are niche airlines?

One could argue that for years, U.S. Airways, and all of it's little regional carriers, were niche airlines. Why? Because they provide service to every po-dunk field on the east coast, when NOBODY else wants to. Go to North Carolina, and you can catch a U.S. Airways flight anywhere! But, can you go to Reno, Nevada on US Air? Hmmm...How about Portland, Oregon? OK, bad cities to pick, I guess.....How about Albuquerque, New Mexico? El Paso, Texas? Come on, guys....a major carrier like this has GOT to go every place in the country. Or....just maybe....

US Airways is a niche airline!!!

According to all of those that call Southwest a niche airline, that's pretty much the criteria you use!! Southwest flies from coast to coast, into airports that put passengers alot closer to where they wanna be (or where they can save the passenger dollars), and aircraft that are safe.....and they do it for a fraction of the cost of the other guys. Unlike many other airlines, Southwest is considered a major carrier. OK, so they don't use 757's. They don't have first class. Is that what's bothering everyone...that they don't have first class??

If anybody in here - ANYBODY - has flown on Southwest in the last 10 years, they'll probably break down and tell you (I could be wrong, but I doubt it...) that Southwest gives the same ride as everone else, faster, cheaper, and more convenient. If they're a niche airline because they can't serve every need of every custumer....then I guess they all are niche airlines (wait....United tried to serve every need, and so did American.....I guess there are some NON-niche airlines).
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What I mean by niche is that all of the discounters combined carry less traffic than the number one, two, and possible three carries by themselves. They've got, all together, about 15 percent of the market. That's a niche, my friend.

If you don't believe me, perhaps you will believe the founder of Southwest, who said that the discounters cannot provide us with the transportation infrastructure we need!
 
Oh, but that's not what a niche is. A niche is "A situation or activity specially suited to one's charachter or abilities". Southwest does the exact same thing as everyone else. As far as percentages, I know that SWA carried 63 million PAX in 2002, and Delta carried 107 million. That's a pretty fair amount of comp....why isn't Delta making money?? (Nothing personal Doug....just picked a random major).

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(hope I don't get booted....)

Oh, well, don't want to beat a dead horse too much....we'll just let the money do the talking....
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Everyone at SWA seems to be pulling on the same side of the rope.

Plus, instead of their management working to crush their one union, they work with their unions, and also are among the highest unionized airlines on the planet.
 
You will also recall that SWA, in it's startup, had to overcome terrific odds to even get approval to fly. During the early 70's, when D/FW was being built, the Wright amendment was passed TO KEEP SWA from flying outside of Texas to eliminate competition with AA.
SO, to this day, in order to fly to Phoenix from Dallas, you have to change planes in El Paso.
AND STILL THEY THRIVE.
 
Thank you, Tony.

I stand by my statement that the LCCs are niche carriers. I don't mean that as an insult, but merely as a statement of fact.

Niche is defined as "A special area of demand for a product or service." That is exactly what these companies focus on. The special area of low-fare, high traffic volume markets.

As I stated before, these companies would not be so successful if they tried to use the same business model to serve airports from Binghamton NY to Paris, France or Knoxville, TN to Hong Kong.

They are quite good at what they do, but what they do is vastly limited in comparison to the major airlines.
 
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I stand by my statement that the LCCs are niche carriers. I don't mean that as an insult, but merely as a statement of fact.

Niche is defined as "A special area of demand for a product or service." That is exactly what these companies focus on. The special area of low-fare, high traffic volume markets.

As I stated before, these companies would not be so successful if they tried to use the same business model to serve airports from Binghamton NY to Paris, France or Knoxville, TN to Hong Kong.

They are quite good at what they do, but what they do is vastly limited in comparison to the major airlines.

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Exactly.

Why do people feel like we're insulting the discounters when we say that they're very good at what they do but that they can't provide us with the transportation infrastructure we need here?

Also, I think that as business travel picks up again, you'll see them plateau, maybe even decline a bit. Business travellers, for the most part, go with the traditional carriers.
 
Actually, Dave kind of is. He's working for a regional, which if you look at it, kind of is a niche carrier.

Me? When that time comes, if Frontier or Southwest or JetBlue wants to hire me, I ain't turning it down.

But I've been told here by some people that since I would think that my job is to fly the plane and not to load bags in order to get a plane out quicker, I wouldn't fit in.

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