SWA to MSP in 2009

Nick

Well-Known Member
The fortress is under attack!


http://biz.yahoo.com/ap/081001/southwest_airlines_credit.html?.v=5



Southwest Airlines to expand to Minneapolis in '09
Wednesday October 1, 4:08 pm ET
By David Koenig, AP Business Writer
Southwest Airlines to serve Minneapolis, faces limited fallout from financial crisis

DALLAS (AP) -- Southwest Airlines Co. plans to begin service next year to Minneapolis, its first new city in more than a year, Chief Executive Gary Kelly said Wednesday.
Other U.S. carriers have sharply cut flights this fall, creating "tremendous opportunities for Southwest Airlines to expand," Kelly said.


The airline's chief financial officer said Southwest has "very limited financing needs" and little immediate exposure to the turmoil in the financial markets.

Laura Wright said Southwest, which enters fuel-hedging transactions with financial-services firms as counterparties, has no exposure to bankrupt Lehman Brothers and only a small amount to brokerages that don't have a commercial banking side.

Wright said Southwest, which reported about $5.8 billion in cash and short-term investments on June 30, has enough cash set aside to cover about 85 percent of its fuel-hedging positions.

Wright said Southwest is worried, however, that further weakening of the economy could hurt demand for air travel.

Separately, Southwest said Wednesday it would set aside priority security lanes for business-fare customers and frequent fliers at seven airports beginning next month. It's similar to an announcement two weeks ago by American Airlines, which will add priority security screening and boarding for top customers.

Long considered an airline catering to leisure travelers, Southwest has been making a push for business travelers. Customers who buy more expensive "business select" tickets will qualify for the faster "fly by" security screening.

Southwest, the only major U.S. airline to remain profitable this year because of those hedges, which reduce the price it pays for fuel, has slowed growth and deferred aircraft it planned to add in 2009, from 14 down to 10 Boeing 737s.

The Dallas-based carrier has bought 26 new jets this year and has three more deliveries scheduled before year-end, but Wright said the strike at supplier Boeing Co. has put those deliveries in doubt.

Wright, speaking during a company meeting with reporters, said Southwest also has an unused $600 million line of credit and believes it could tap European bank credit markets, as it did this spring.

Southwest debt is rated "A-minus," still investment-grade, by Standard & Poor's and Fitch Ratings, and "Baa1" by Moody's.

The company has hedged against 80 percent of its fuel needs for the fourth quarter at an average price equivalent to $58 per barrel fuel, and is more than 70 percent hedged next year at $66 per barrel, Wright said.

Southwest boasts in advertising that it foregoes the fees that other airlines charge, but it too is looking for new sources of revenue. The airline will soon begin testing Internet access in flight, and plans to charge for it. It is boosting sales of alcohol by accepting credit cards instead of cash.

The company reports third-quarter results on Oct. 16.

Shares of Southwest Airlines Co. fell 21 cents, or 1.5 percent, to $14.30 in afternoon trading. Other airline stocks rose. Those carriers are not as well insulated from fuel prices, so Wednesday's decline in oil prices offered them more support.
 

Nick

Well-Known Member
I see that.

I am an inept forum user and should be banned.

But look at the wonderful descriptiveness of my post! A vast improvement despite being just seven minutes later in time.


I wonder when SWA will announce which cities.
 

JEP

Malko In Charge
Staff member
I wonder though whether or not they will use the Lindbergh terminal. I know the MAC would love to fill some gates at the Humphrey Terminal. It is much nicer and a lot less hassle than the main terminal.
 

Nick

Well-Known Member
I wonder though whether or not they will use the Lindbergh terminal. I know the MAC would love to fill some gates at the Humphrey Terminal. It is much nicer and a lot less hassle than the main terminal.
Also didn't AirTran stop some or all MSP service recently? (MDW-MSP?) That should have opened up some gate space.

I think this will make it very difficult for Sun Country to survive, unfortunately.
 

JEP

Malko In Charge
Staff member
Also didn't AirTran stop some or all MSP service recently? (MDW-MSP?) That should have opened up some gate space.

I think this will make it very difficult for Sun Country to survive, unfortunately.
AirTran may have reduced service, but I still see one of there 717's parked at the gate (closest to Post Rd. and 34th) when I go to work every night. I usually see one of their 73's climbing out on my way home from work, too.
 

TXaviator

Well-Known Member
of COURSE they announce this when i am LEAVING this area.

could have saved hundreds/thousands on plane tickets back to TX in the last 4 years!!!


:banghead::banghead::banghead::banghead::banghead::banghead:


:mad:
 

SlumTodd_Millionaire

Evil Landlord Capitalist
AirTran may have reduced service, but I still see one of there 717's parked at the gate (closest to Post Rd. and 34th) when I go to work every night. I usually see one of their 73's climbing out on my way home from work, too.
We stopped serving the MDW-MSP route, because NWA was low-balling the price so much that we couldn't turn a profit, but we didn't give up any gates. We're still serving several cities out of MSP. It'll be interesting to see how NWA defends their turf against SWA. If we can't turn a profit on the route, then SWA can't either. Our all-in CASM is identical to theirs. When we were engaged in a far war with NWA for the route, the average fare was $150, but right after we left NWA jacked the fare back up to $390. They don't hesitate to defend their turf, even though they aren't quite as territorial as AMR.
 

blee256

Well-Known Member
My guess is, with the Delta merger, SWA is assuming that the service in MSP will drop off dramatically.
 

PGT

Well-Known Member
My guess is, with the Delta merger, SWA is assuming that the service in MSP will drop off dramatically.
Doesn't the state of Minnesota have some sort of agreement with NWA? I believe the state loaned them a bunch of money and in exchange MSP would stay for x years.
 

JEP

Malko In Charge
Staff member
Doesn't the state of Minnesota have some sort of agreement with NWA? I believe the state loaned them a bunch of money and in exchange MSP would stay for x years.
That is correct. There is an agreement between the MAC and NWA that if they leave within 'X' amount of time they would be subject to a fine/forfiture of $250 million I believe. Rest assured there will be finagling between DeltaWest when the time comes.

SWA will be flying out of the Humphrey terminal as MAC wants to fill those gates. NWA will fight/match fares, but given the choice many may choose the Humphrey terminal; more convenient, less crowded.

Wait and see for now......
 

Seggy

Well-Known Member
SWA Vacations is going to be offering MSP as a vacation destination in the winter for ice fishing.
 
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