Southwest Airlines has, yet again, survived another year profitably; their 36th year in a row! However they did not net a profit for the fourth quarter of 2008. Instead, the carrier announced yesterday that they lost $56 million in the fourth quarter – noting fuel hedging for the loss. Southwest said that they have cut back on fuel hedging, and they also mentioned a capacity cut of 4% as the carrier receives plenty 737-700s from Boeing.
Although the quarter was a loss, it did look somewhat positive. The airline still has plans for expansion, route-map wise. Southwest Airlines CEO Gary Kelly said Southwest saw a 7 percent increase in RPMs (revenue per seats times miles flown). The low-cost carrier also announced that they saw a nice revenue boost, .7 percent, to $2.73 billion.
Southwest, as always, is growing. However, Southwest cut back on their fleet expansion for 2009 and 2010. The company said that they plan on ending 2009 with 535 planes, instead of 537, as planned. Rather than receiving 22 737s in 2010, the airline said it was cutting that number to just 10. By doing this, Southwest has cut their aircraft capital spending by approx. $700 million for ’09 and ’10.
I must admit that I’m a bit surprised by this loss. I expected Southwest to make some money this quarter; not much, but some. I must admit that I greatly anticipate their expansion plans – I’m always looking forward to where Southwest Airlines flies next.
Update on US Airways Poll:
On Wednesday I posted the rates that US Airways compensated customers on-board flight 1549. The question was: “How Should US Airways Compensate those On-Board Flight 1549? (For Luggage + Distress).” The results are in! 44% of you agreed with US Airways’s decision to compensate passengers $5,000. 33%, or about 1/3, of you said you think US Airways should compensate passengers with $8,000 +. And last but not least we have a tie, as one of you (11% of all voters) voted for below $3,000, and another individual voted for $5,000 to $8,000. The results are interesting - definitely not what I expected, but that’s why I have polls; to see what you think!
Remember that tomorrow I’ll have Saturday Connections up, Aviation Buzz’s new podcast that examines the week’s news in aviation. Have a great weekend!
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