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LIVE MOSAIC Town Hall (Archived): www.airborne-live.net

Thu, Jan 23, 2003

Southwest: Still Largest Profitable Airline

Quarter, Year Show Pressure on Profits

Southwest Airlines net income for fourth quarter 2002 was $42.4 million, compared to $63.5 million for fourth quarter 2001. Net income per diluted share was $.05 for fourth quarter 2002, compared to $.08 in fourth quarter 2001. The $.05 per diluted share compares favorably to First Call's consensus estimate of $.03 for fourth quarter 2002. The Company's fourth quarter 2001 net income, excluding special items, was $32.4 million, or $.04 per diluted share.

The Company also reported its 30th consecutive year of profitability, with annual net income of $241.0 million or $.30 per diluted share, compared to 2001 net income of $511.1 million or $.63 per diluted share.

James F. Parker, Vice Chairman and Chief Executive Officer, stated: "In the context of what has been the worst year in commercial aviation history, we are very proud and grateful to report another profitable quarter and our 30th consecutive year of profitability. As a result, we are pleased to be able to reward our dedicated Employees for their valiant efforts over the past year with a $71 million contribution to the Company profitsharing plan. Although our fourth quarter and full year 2002 financial results are disappointing relative to historical standards, our performance relative to that of the industry as a whole has been excellent.

"Since September 11, 2001, the airline industry has continued to suffer from depressed business travel and weak overall demand for air travel. Our fourth quarter unit revenue of $.0797 fell well below pre-September 11, 2001 levels. Based on the weak 2002 revenue environment and current booking tendencies, we expect this post-September 11 revenue trend to continue through first quarter 2003. And, given the added threat of war with Iraq, it is simply impossible to predict first quarter 2003 unit revenues. If, however, current revenue trends were to continue, first quarter 2003 unit revenues should exceed last year's first quarter unit revenue performance of $.0761.

"As expected, our fourth quarter 2002 CASM exceeded the very low fourth quarter 2001 unit cost performance of $.0703, excluding special items. Our jet fuel cost per gallon averaged $.7087 in fourth quarter 2002 versus $.6030 per gallon in fourth quarter 2001, an increase of 17.5 percent. For first quarter 2003, we previously hedged 85 percent of our requirements with caps in the $23 per barrel range.

Recently, we hedged the remaining 15 percent of our first quarter requirements at prevailing yearend market prices. We are hedged 87 percent for second quarter 2003 and approximately 75 percent for second half 2003 with caps in the $23 per barrel range. In addition, we are hedged 80 percent in 2004 with caps in the $23 per barrel range. Excluding fuel and special items, unit costs increased 4.3 percent.

"While we face various cost challenges and expect our first quarter and full year 2003 unit costs, excluding fuel, to exceed 2002 levels, we do not expect cost increases of the magnitude seen in fourth quarter. We will continue our diligent cost control efforts and remain committed to maintaining our competitive cost advantage and longstanding quality Customer Service. However, based on the uncertain revenue environment, we cannot guarantee a profitable first quarter 2003."

FMI: www.southwest.com

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© 2007 - 2025 Web Development & Design by Pauli Systems, LC


Debugging Information
ColdFusion Server Enterprise 2023,0,16,330828
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Time Stamp 02-Dec-25 02:08 AM
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0 ms 0 ms 1 CFC[ C:/inetpub/wwwroot/clients/aero-news.net/fb551/fusebox5/myFusebox.cfc | getSelf() ] from C:/inetpub/wwwroot/clients/aero-news.net/fb551/fusebox5/myFusebox.cfc
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