Mwhahahahahahahahahahahahahahahahahh hahahahah hahahahahahaha hahahahahah <Hey Delta, United, American....your senior management and greedy pilots are not helping you out any....use some common sense (an airline management oxy-moron) and maybe, just maybe all three of your beloved companies will be around 10 years from now.> Walter DCA ----- Original Message ----- From: "Bill Hough" <psa188@juno.com> To: <AIRLINE@LISTSERV.CUNY.EDU> Sent: Wednesday, December 26, 2001 21:51 Subject: SF Gate: Southwest flying high in downturn/No-frills airline singed, but not burned, by recession > Wednesday, December 26, 2001 (SF Chronicle) > Southwest flying high in downturn/No-frills airline singed, but not burned,= > by recession > Stephanie Stoughton, Boston Globe > > > Dallas -- Southwest Airlines has always been the country's quirkiest > carrier, with its chain-smoking founder, corny cabin jokes and no-frills > flights. But amid the recent turbulence, the nation's seventh-largest > airline is bucking the prevailing industry trends by resuming growth, > planning for a full-year profit and watching its market value eclipse > those of its giant rivals. > No carrier can boast that it has escaped the dramatic effects of the > industry's global downturn, which was exacerbated by the terrorist > hijackings. Southwest is no exception. Although passengers are starting to > return to the air, the slumping economy and staggering security costs > continue to hurt the Dallas company's bottom line. > But Southwest has emerged as a leader in the industry's recovery, and one > now enjoying unusual support from its employees, customers and investors. > Workers praise the company for trimming expenses without layoffs and > flight reductions, in spite of punishing declines in passenger traffic > after Sept. 11. > Wall Street loves Southwest, too: The carrier's shares quickly rebounded > following the terrorist attacks, while its competitors' stocks continued > to languish. By last week, Southwest's market value had soared past $14 > billion, topping the combined stock values of American Airlines, United > Airlines, Delta Air Lines, Continental Airlines, Northwest Airlines and US > Airways. > Southwest's stock closed down 18 cents to $18.65 per share on Monday. > Investors have long seen Southwest's business model as one of the > industry's strongest because of its discount fares, low operating costs > and the lowest debt-to-capital ratio among the major airlines. Southwest > has a cash stockpile of more than $2 billion. All of this has contributed > to the company's strong performance on Wall Street and a faster turnaround > in its business than its rivals since the attacks. > POPULAR WITH THE PUBLIC > Passengers have also cheered on the company by refusing to cash in refun= > ds > and pledging to purchase Southwest's shares following the terror attacks. > In letters to the airline, they shared post-Sept. 11 stories about flight > crews who calmed nerves and helped stranded travelers. > One letter described the flight attendant who softly sang the national > anthem over the intercom after passengers on Southwest Airlines Flight 247 > from St. Louis to Salt Lake City had settled nervously in their seats. > "The pilot paused at end of the runway to allow the song to finish, the > passengers burst into applause, (and) then we were off, soaring into the > night sky," the customer wrote. "It was a moment I'll remember always." > Gazing at the ticker symbols, big players that once dismissed their > smaller competitor recognize that Southwest can afford to pick some of > them off. Southwest executives say this is an unlikely event, though. They > remain uninterested in absorbing giant carriers wallowing in debt and > flying with incompatible business models. > "Why would we do that?" Southwest Chief Executive Officer James F. Parker > said incredulously. "It's not a market share game. We have the ability to > grow from within." > Instead of helping the airline spread its wings, a big merger would lead > to Southwest's "own demise," he said. > Southwest executives and analysts credit the company's streamlined > operations for the airline's continued success in a difficult economic > environment. Unlike other airlines, Southwest flies only the Boeing 737, > which keeps pilot training and mechanical costs at a minimum. Flying > short- and intermediate-haul flights into smaller facilities like > Manchester Airport and Providence's T.F. Green Airport translates into > smaller landing fees and speedier in-and-out flight service. > CARRIER CUTS COSTS > Frequent fliers on Southwest know better than to arrive with empty > stomachs. > That's because the low-fare carrier feeds them only peanuts and other > snacks. It also keeps costs down by refusing to assign seats or wait for > late passengers. The airline boasts that it can unload and reload a jet in > 20 minutes, though that has become a challenge because of beefed-up > security measures. > Southwest also enjoys smooth employee relations. It prides itself on > hiring loyal staff with a flair for customer service and pilots who will > deign to pick up trash after flights. In return, Southwest has never laid > off a worker since it was founded 30 years ago by Rollin King and Herb > Kelleher. Even after Sept. 11, the airline refused to resort to layoffs or > furloughs, instead compensating for weaker sales by delaying the delivery > of 19 Boeing jets. > Southwest has so far managed to avoid the industry's financial quagmires, > which could lead to the collapse of a few weaker carriers in 2002. > Overall, the industry's capacity, or available seat miles, fell 15 percent > domestically in November because of schedule cuts. In sharp contrast, > Southwest's capacity increased 7 percent last month. The carrier's load > factor, or percentage of seats filled, was 65.3 percent, which was > deceptively lower than the industry average of 68.2 percent. Unlike other > airlines, Southwest refrained from cutting flights systemwide and even > opened up for business in Norfolk, Va. However, the company acknowledges > it "bought" back passengers with aggressive fares. > READY FOR RECOVERY > Analysts say Southwest's healthy finances put it in a position to grow > rapidly once the U.S. economy improves. Last week, Southwest said it would > accept delivery of two of the deferred Boeing aircraft. It will use the > jets to supplement service in five cities. > "If the industry recovers by mid-year 2002, Southwest should recover > before then," said James D. Parker, an analyst with Raymond James & > Associates in Atlanta. "Remember that the industry took out 20 percent of > their business, but Southwest took out none. . . . That will leave of lot > of business for Southwest and other low-fare carriers." > Michael Dyment, a partner at the consulting firm Andersen, said Southwest > will also benefit when major airlines raise fares after months of > discounting. > "The economy will come back, the passengers will come back, and the > airlines will try to manage demand by increasing prices," Dyment said. > "Then, Southwest will come in and expand at a much faster rate." > Southwest has not ruled out revamping its business to include > transcontinental flights -- a terrifying prospect for its rivals, which > have been forced to lower fares in overlapping markets. The irony is not > lost on CEO Parker, who says the powerful airlines should have thought > twice before supporting federal taxes and security fees based on flight > segments, which hurt carriers flying shorter routes. > "What they did is shift our business model," Parker said. > Before any major expansion, though, Parker and his team must wait for > sales to rebound. In the third quarter, Southwest's net income dropped 18 > percent to $151 million compared with the year-earlier period, even after > a pretax gain of $169 million from the federal airline rescue package. > Operating revenue fell almost 10 percent to $1.34 billion in the quarter > ended Sept. 30. > "I don't know if you can get business back to normal in this environment= > ," > Parker said. "The emotional effects are diminishing. But the economic > effects continue to linger." > With December traffic unpredictable until the last week of the year > because of holiday travel, the company is not promising to post a profit > in the last three months of the year. But "odds are we will lose money" in > the quarter, said Gary Kelly, Southwest's chief financial officer. > =20=20=20=20 > ---------------------------------------------------------------------- > Copyright 2001 SF Chronicle