Scandinavian Airlines-SAS (Stockholm) is now connecting Houston, Texas, with Stavanger in Norway through six days a week nonstop air service. The initiative is expected to significantly strengthen the economic and cultural ties that already exist within the oil and gas industry in the regions. The route will be operated by a business version of the Boeing 737-700 aircraft and will have a SAS Long Haul Business Class concept on board with just 44 comfortable business seats, in-flight entertainment and full-service meals.
Departures from Stavanger will be daily, except Tuesdays, at 4:00 pm arriving in Houston (Bush Intercontinental) at 7:40 pm (1940) the same day. SAS will depart from Houston to Stavanger daily except Tuesdays at 9:35 pm (2135) arriving the next day in Stavanger at 2.20 pm (1440). SAS will be the only airline with nonstop service between Scandinavia and Houston.
In addition to the Houston-Stavanger route, SAS also operates nonstop service from Newark to Copenhagen, Oslo and Stockholm, from Chicago (O’Hare) to Copenhagen and Stockholm, and from Washington, D.C. and San Francisco to Copenhagen.
Copyright Photo: Stefan Sjogren/AirlinersGallery.com. Boeing 737-705 LN-TUD (msn 28217) arrives at the Stockholm (Arlanda) hub.
Southwest Airlines (Dallas) launched its initial service to Mexico with inaugural flights over the weekend. The nonstop routes previously served by wholly owned subsidiary AirTran Airways now operate daily between Orange County/Santa Ana and San Jose del Cabo/Los Cabos, Mexico, and between Cancun and both Atlanta and Baltimore/Washington.
Saturday-only service on Southwest between Milwaukee and Cancun begins August 16, 2014.
The Company plans to fully convert all international and domestic service currently flown by AirTran to Southwest by the end of this year. The carriers’ flights schedules are published through March 6, 2015, and are available for purchase at southwest.com.
AirTran Airways continues to operate daily service between Mexico City and Orange County/Santa Ana until the route converts to Southwest Airlines service on Nov. 2, 2014.
Southwest Airlines began international service on July 1 with flights to Oranjestad, Aruba; Montego Bay, Jamaica; and Nassau, The Bahamas, in the Caribbean. International service from Denver begins Oct. 7. Additional international service from Chicago (Midway), Austin, and San Antonio begins Nov. 2, the same day Southwest Airlines begins serving Punta Cana, Dominican Republic*, and Mexico City.
*subject to Government approvals
Copyright Photo: Bruce Drum/AirlinersGallery.com. Boeing 737-7H4 N228WN (msn 32496) departs from Fort Lauderdale-Hollywood International Airport.
Southwest Airlines (Dallas) and SeaWorld have issued this joint statement:
“Southwest and SeaWorld have mutually decided not to renew their partnership when the contract expires at the end of the year. Our promotional marketing relationship began in 1988 and was one of the first of its kind – focused on co-marketing opportunities between Southwest passengers and SeaWorld visitors.
The companies decided not to renew the contract based on shifting priorities. Southwest is spreading its wings with new international service, and increased focus on local market efforts. With an increasing international visitor base, SeaWorld is looking to focus on new and growing markets in Latin America and Asia, among others.
The companies will continue to work together through Southwest Vacations. Southwest’s three specialty airplanes will return to the company’s traditional livery.
Southwest and SeaWorld have enjoyed their long relationship, and wish each other continued success.”
Southwest and SeaWorld have both been coming under a lot of public pressure on change.org in the form of a public petition calling for Southwest to separate itself from SeaWorld in the wake of the documentary Blackfish movie which criticized SeaWorld’s on-going procedures concerning the capture, training and containment of its orca whales. The death of a SeaWorld female trainer by an orca in captivity also spurred the release of the movie.
Read the petition: CLICK HERE
SeaWorld responded to the movie Blackfish with this statement: CLICK HERE
Top Copyright Photo: Michael B. Ing/AirlinersGallery.com. The three remaining Shamu specially painted Boeing 737s will be repainted. Boeing 737-7H4 N713SW (msn 27847) arrives in Los Angeles.
Bottom Copyright Photo: Ton Jochems/AirlinersGallery.com. The colorful “Penguin One” will also be erased.
Video: Blackfish movie trailer:
Record quarterly net income, excluding special items*, of $485 million, or $.70 per diluted share, compared to second quarter 2013 net income, excluding special items, of $274 million, or $.38 per diluted share. This exceeded the First Call consensus estimate of $.61 per diluted share.
Record quarterly net income of $465 million, or $.67 per diluted share, which included $20 million (net) of unfavorable special items, compared to second quarter 2013 net income of $224 million, or $.31 per diluted share, which included $50 million (net) of unfavorable special items.
Record quarterly operating income of $775 million. Excluding special items, record quarterly operating income of $819 million, resulting in a 16.3 percent operating margin**.
Return on invested capital*, before taxes and excluding special items, for the 12 months ended June 30, 2014, of 17.1 percent, as compared to 8.5 percent for the 12 months ended June 30, 2013.
Gary C. Kelly, Chairman of the Board, President, and Chief Executive Officer, stated:
“We are very pleased with our strong second quarter earnings performance. Net income, excluding special items, of $485 million, or $.70 per diluted share, represents our fifth consecutive quarter of record profits. The successful execution of our strategic initiatives continues to contribute significantly to these record profits. Second quarter 2014 total operating revenues reached an all-time quarterly high of $5.0 billion, benefiting from an 8.5 percent year-over-year increase in passenger revenues. Also, we were very pleased with our cost performance. Operating expenses benefited from our strategic initiatives, as well, and were comparable to second quarter last year.
“My hearty congratulations and thanks go to our hard-working and dedicated Employees for our outstanding second quarter results, which resulted in record quarterly profitsharing expense of $127 million. Over the last twelve months, our exceptional earnings performance, combined with our actions to prudently manage our invested capital, produced a 17.1 percent pre-tax return on invested capital, excluding special items (ROIC). This positions us well to meet or exceed our 15 percent pre-tax ROIC target for full year 2014.
“Our network development and optimization efforts continue, and we are very pleased with the performance across our system. Second quarter load factor and passenger revenue yield were records, even with a large percentage of the route system in the conversion or development stage. We announced our initial nonstop offerings from Dallas Love Field with the upcoming sunset of the Wright Amendment restrictions on October 13, and nearly tripled the flights we currently offer at Reagan National Airport, effective November 2 this year. On July 1, we inaugurated international service on Southwest Airlines, with flights to Oranjestad, Aruba; Montego Bay, Jamaica; and Nassau/Paradise Island in The Bahamas. We plan to fully convert AirTran’s remaining international markets and domestic flying by the end of this year. We expect roughly flat 2014 available seat miles, year-over-year, and intend to expand the network in a disciplined manner. For 2015, we currently expect our available seat miles to increase, year-over-year, largely driven by a two to three percent growth in seats from the upgauging of our fleet, along with a higher percentage of our fleet in revenue service post-integration.
“During second quarter, we announced the selection of Amadeus to implement the Altéa reservations solution to support our domestic network, following the successful implementation of Amadeus’ international solution this year. This allows us to replace the legacy reservation system used by Southwest. The AirTran reservation system is expected to be retired at this year’s end.
“Our balance sheet, liquidity, and cash flows remain strong. At the end of second quarter 2014, we had $4.0 billion in cash and short-term investments. For first half 2014, net cash provided by operations was $2.46 billion, and capital expenditures were $907 million, resulting in strong free cash flow* of $1.55 billion. We repaid $119 million in debt and capital lease obligations during first half 2014, and intend to repay an additional $440 million in debt and capital lease obligations in the second half of this year. Thus far this year, we have returned $652 million to Shareholders through the payment of $97 million in dividends and the repurchase of $555 million in common stock. As always, we are committed to maintaining our financial strength and enhancing value to our Shareholders.”
Financial Results and Outlook
The Company’s second quarter 2014 total operating revenues increased 7.9 percent, while operating unit revenues increased 8.4 percent, on a 0.4 percent decrease in available seat miles and a 2.2 percent increase in average seats per trip, all as compared to second quarter 2013. Second quarter 2014 passenger revenues were $4.8 billion, which was an increase of 9.0 percent on a unit basis, as compared to second quarter 2013. A change to previously recorded estimates of tickets expected to spoil in the future resulted in additional passenger revenue of $47 million in second quarter 2014.
Thus far, July passenger revenue trends and bookings are strong. Based on these trends, and considering the strength of the year-ago comparison, the Company expects July 2014 passenger unit revenues to increase in the three percent range, as compared to July 2013.
Total operating expenses in second quarter 2014 increased 0.6 percent to $4.2 billion, as compared to second quarter 2013. Second quarter 2014 profitsharing expense was a record $127 million, compared to $78 million in second quarter 2013. The Company incurred costs (before profitsharing and taxes) associated with the acquisition and integration of AirTran, which are special items, of $38 million during second quarter 2014, compared to $26 million in second quarter 2013. Cumulative costs associated with the acquisition and integration of AirTran, as of June 30, 2014, totaled $466 million (before profitsharing and taxes). The Company expects total acquisition and integration costs to be approximately $550 million (before profitsharing and taxes). Excluding special items in both periods, total operating expenses in second quarter 2014 increased 0.7 percent to $4.2 billion, as compared to second quarter 2013.
Second quarter 2014 economic fuel costs were $3.02 per gallon, including $.05 per gallon in favorable cash settlements from fuel derivative contracts, compared to $3.06 per gallon in second quarter 2013, including $.05 per gallon in unfavorable cash settlements from fuel derivative contracts. Based on the Company’s fuel derivative contracts and market prices as of July 21, 2014, third quarter 2014 economic fuel costs are expected to be in the $2.95 to $3.00 per gallon range, compared to third quarter 2013’s economic fuel costs of $3.06 per gallon. As of July 21, 2014, the fair market value of the Company’s hedge portfolio through 2018 was a net asset of $381 million. Additional information regarding the Company’s fuel derivative contracts is included in the accompanying tables.
Excluding fuel and oil expense, profitsharing, and special items in both periods, second quarter 2014 operating costs increased 1.1 percent from second quarter 2013, and increased 1.7 percent on a unit basis. Based on current cost trends, and excluding fuel and oil expense, profitsharing, and special items, the Company expects a year-over-year increase in its third quarter 2014 unit costs, comparable to the second quarter 2014 year-over-year increase.
Operating income in second quarter 2014 was $775 million, compared to $433 million in second quarter 2013. Excluding special items, operating income was $819 million in second quarter 2014, compared to $479 million in the same period last year, a 71.0 percent increase year-over-year.
Other expenses in second quarter 2014 were $29 million, compared to $70 million in second quarter 2013. The $41 million decrease primarily resulted from $3 million in other losses recognized in second quarter 2014, compared to $47 million recognized in second quarter 2013. In both periods, these losses included ineffectiveness and unrealized mark-to-market amounts associated with a portion of the Company’s fuel hedging portfolio, which are special items. Excluding these special items, second quarter 2014 had $15 million in other losses, compared to $12 million in second quarter 2013, primarily attributable to the premium costs associated with the Company’s fuel derivative contracts. Third quarter 2014 premium costs related to fuel derivative contracts are currently estimated to be $15 million, compared to $22 million in third quarter 2013. Net interest expense in second quarter 2014 was $26 million, compared to $23 million in second quarter 2013.
For the six months ended June 30, 2014, total operating revenues increased 5.2 percent to $9.2 billion, while total operating expenses decreased 0.4 percent to $8.2 billion, resulting in operating income of $991 million, compared to $503 million for the same period last year. Excluding special items, operating income was $1.1 billion for first half 2014, compared to $591 million for first half 2013.
Net income for first half 2014 was $617 million, or $.88 per diluted share, compared to $283 million, or $.39 per diluted share, for the same period last year. Excluding special items, net income for first half 2014 was $611 million, or $.87 per diluted share, compared to $328 million, or $.45 per diluted share, for the same period last year.
Balance Sheet and Cash Flows
As of June 30, 2014, the Company had $4.0 billion in cash and short-term investments, and a fully available unsecured revolving credit line of $1 billion. Net cash provided by operations during second quarter 2014 was $1.34 billion, and capital expenditures were $500 million, generating strong free cash flow of $838 million. The Company repaid $73 million in debt and capital lease obligations during second quarter 2014.
During second quarter 2014, the Company returned $282 million to its Shareholders through the payment of $42 million in dividends and the repurchase of $240 million in common stock, or 7.6 million shares. The Company completed its previous $1.5 billion share repurchase program with the repurchase of $20 million in common stock in early May. On May 14, 2014, the Company’s Board of Directors authorized a new $1 billion share repurchase program, along with a 50 percent increase in the Company’s quarterly dividend. Under the new $1 billion share repurchase program, the Company repurchased an additional $220 million in common stock during second quarter 2014, including $200 million repurchased under an accelerated share repurchase program with a third party financial institution. During second quarter 2014, pursuant to the accelerated share repurchase program, the Company advanced $200 million to the financial institution and received six million shares of the Company’s common stock, representing an estimated 75 percent of the shares the Company expects to purchase under the accelerated share repurchase program. The specific number of shares that the Company ultimately will repurchase under the accelerated share repurchase program will be determined generally based on a discount to the volume-weighted average price per share of the Company’s common stock during a calculation period to be completed during third quarter 2014. At settlement, under certain circumstances, the third party financial institution may be required to deliver additional shares of common stock to the Company, or under certain circumstances, the Company may be required to deliver shares of its common stock or may elect to make a cash payment to the third party financial institution. Pursuant to the settlement of the $200 million accelerated share repurchase program executed in first quarter 2014, the Company received an additional 1.7 million shares in common stock during second quarter 2014, bringing the total shares repurchased under the first quarter accelerated share repurchase program to 8.6 million.
During second quarter 2014, the Company’s fleet increased by seven to 683 aircraft at period end. This reflects the second quarter 2014 delivery of 12 new Boeing 737-800s and three pre-owned Boeing 737-700s, as well as the retirement of one Boeing 737-500. In addition, the Company removed seven Boeing 717-200s from service during second quarter 2014 in preparation for transition out of the fleet.
Boeing 737 NG Delivery Schedule:
*Additional information regarding special items is included in the accompanying reconciliation tables, and see Note Regarding Use of Non-GAAP Financial Measures.
**Operating margin, excluding special items, is calculated as operating income, excluding special items, divided by operating revenues.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 737-7H4 N280WN (msn 32533) in the Penguin One special livery arrives in Los Angeles.
Sun Country Airlines (Minneapolis/St. Paul) is expanding in the Caribbean, Mexico and Central America this coming winter with new seasonal service. The airline will start weekly service from MSP to St. Maarten (December 20 through April 4), Manzanillo (January 8 through April 2) and Rio Hato (near Panama City) December 26 through April 3 per Airline Route.
Copyright Photo: Ton Jochems/AirlinersGallery.com. Boeing 737-752 N714SY (msn 33786) taxies at Los Angeles.
Boeing (Chicago and Seattle) rolled out the 5000th Next-Generation 737 this week. The airplane is a Boeing C-40A Clipper, a modified 737-700C, that will serve as a transport aircraft for the U.S. Navy.
Utilizing the 737 commercial platform takes advantage of the proven efficiencies, manufacturing processes and performance of the existing Next-Generation 737 production system. Boeing’s P-8 maritime patrol aircraft, Airborne Early Warning and Control (AEW&C) and the C-40 are among the 737 military derivatives.
To date, orders stand at 6,804 for Next-Generation 737s and 2,109 for 737 MAXs. Total 737 orders have surpassed 12,000 including Classics and more than 100 orders for military derivatives.
Copyright Photo: Boeing.
Delta Air Lines (Atlanta) effective August 1 will reduced its service on the Atlanta-Caracas route to one flight a week per Airline Route. This move follows the actions of American Airlines. Both carriers are reducing services to CCS due to the Venezuelan government’s attempt to disallow the transfer of funds out of Venezuela.
Copyright Photo: Jay Selman/AirlinersGallery.com. The route will now be operated with smaller Boeing 737-700s. Boeing 737-732 N309DE (msn 29634) arrives at the New York (JFK) hub.
United Airlines flight 1463 is forced to make an emergency landing at Wichita after the emergency chute accidentally inflates inflight
United Airlines (Chicago) flight UA 1463 was forced to make an emergency landing at Wichita, Kansas after the aft emergency chute accidentally inflated while the Boeing 737-700 was at cruising altitude. According to Flight Aware the 737-700 with 96 passengers and crew members on board was forced to make a rapid descent before the safe landing. Flight 1463 was en route from the Chicago (O’Hare) hub to Orange County (Santa Ana).
Read the full report from Eyewitness News 12: CLICK HERE
Twitter Photo: Taylor Martinez.
Sun Country Airlines (Minneapolis/St. Paul) starting on January 16, 2015 will add a new seasonal route to Nassau in the Bahamas from Minneapolis/St. Paul (MSP). The new route will initially operate weekly and then increase to three roundtrips a week starting on February 12, 2015.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 737-7Q8 N712SY (msn 28219) approaches the runway at Los Angeles International Airport.
WestJet (Calgary) today (June 24) launches new nonstop, twice-weekly service between Las Vegas and Fort McMurray, Alberta. Today’s inaugural flight represents even more service to Fort McMurray as part of a major expansion of flights into the oil sands region.
Copyright Photo: Jay Selman/AirlinersGallery.com. Boeing 737-76N C-GWSE (msn 33379) prepares to touch down in Las Vegas.
Scandinavian Airlines-SAS (Stockholm) is again back in a financial crisis mode. After reporting a net loss of over $120 million in its fiscal second quarter ending on April 30, the airline has announced it is again tightening its efforts to reduce costs. This time it will include another 300 jobs being axed. The airline is coming under intense pressure from lower cost airlines like Norwegian and Ryanair.
Read the full report from the company: CLICK HERE
Read the analysis from the Wall Street Journal: CLICK HERE
Copyright Photo: Stefan Sjogren/AirlinersGallery.com. Boeing 737-783 LN-RNU (msn 34548) arrives back at the Stockholm (Arlanda) hub.
Boeing (Chicago and Seattle) has announced Southwest Airlines (Dallas) has selected Boeing Airplane Health Management (AHM) to enhance operational efficiency in its maintenance and engineering operations.
Southwest Airlines will use Airplane Health Management to collect and evaluate airplane operations data while the airplane is in flight. This real-time data is used to signal ground operations crews of any potential maintenance issues before the airplane lands, minimizing flight schedule disruptions and maintenance-related delays.
Boeing technical teams will work with Southwest to facilitate initial deployment of the system for its Next-Generation 737s. Southwest is Boeing’s 66th customer for Airplane Health Management.
According to Boeing, “Boeing Airplane Health Management is a powerful, data-driven capability used worldwide by airplane operators and maintenance, repair and overhaul providers (MROs) to proactively manage the serviceability of airplanes and fleets. It is designed to interface with existing airplane systems and communication infrastructure, using state-of-the-art airplane and ground technology to address day-of-operation disruptions, help predict future operations events and prevent unplanned maintenance and schedule interruptions.”
Airplane Health Management is part of an integrated suite of aviation services marketed as the Boeing Edge. These include parts, training, engineering, maintenance and software solutions that increase the efficiency and profitability of airlines and leasing companies.
Southwest Airlines is an all-Boeing carrier and operates the largest 737 fleet of any airline. In 2011, the airline became the launch customer for the 737 MAX.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 737-7H4 N214WN (msn 32486) in the special “Maryland One” state theme arrives at Los Angeles International Airport.
Southwest Airlines (Dallas) has converted four more destinations and added flights from Akron-Canton Airport (CAK). Southwest, the busiest airline operating out of CAK, now offers eight daily nonstop flights from the airport. Destinations with new or additional Southwest service from Akron-Canton include Boston (Logan), New York (LaGuardia), Orlando and Denver (a second seasonal round trip). To celebrate the largest single conversion from AirTran Airways to Southwest Airlines, CAK and Southwest officials will hold a British invasion themed press conference and all day long gate party on June 9. A Beatles® cover band, balloon twisting, trivia contest and colossal #CAKFab4 destinations display will greet customers as the depart and arrive throughout the day.
Southwest Airlines will take over all routes to/from CAK on November 2, 2014 as well as adding a daily nonstop flight to Ronald Reagan Washington National Airport. The last AirTran Airways flight from CAK will be to Atlanta on November 1.
Copyright Photo: Jay Selman/AirlinersGallery.com. Boeing 737-7H4 N449WN (msn 32469) arrives in Las Vegas.
Aerolíneas Argentinas (Buenos Aires) has issued photos and images of the scheme and the painting of the special FIFA 2014 World Cup livery that has been applied to Boeing 737-7Q8 LV-CSI (msn 30707) which will transport the Argentine football (soccer) team to Brazil for the upcoming games.
Copyright Photo: Workers apply the special decals showcasing the players from Argentina.
Special thanks to Alvaro Romero, reporting from neighboring Chile.
Copyright Photo and Images: Aerolineas Argentinas.
United Airlines (Chicago) will start a new international route from its Denver hub to Panama City, Panama on December 3. The new route will be operated daily with Boeing 737-700s per Airline Route.
Copyright Photo: Ton Jochems/AirlinersGallery.com. Boeing 737-724 N39728 (msn 28944) approaches the runway at Los Angeles International Airport.
United Airlines (Chicago) has filed to operate nonstop Guam-Shanghai (Pudong). According to Airline Route, the new route will be operated two days a week with Boeing 737-700s.
In addition, United is dropping the Los Angeles-Kelowna, British Columbia route on September 2 (switched to the San Francisco hub) as well as the Los Angeles-Bakersfield route on August 19. The company is also ending the Newark-Moncton route on September 18.
Copyright Photo: Ton Jochems/AirlinersGallery.com. Boeing 737-724 N16709 (msn 28779) taxies at Los Angeles International Airport (LAX).
United Airlines (Chicago) today announced that it will introduce nonstop flights between its hub at Denver International Airport and Panama City beginning on December 3, subject to government approval with flights available for sale at a later date. The new service will operate daily November through August and five times weekly in September and October, offering Denver-area travelers direct access to the Panamanian capital and connections to several additional cities in Central and South America through United’s strategic partnership with Copa Airlines.
United will operate the service with Boeing 737-700 aircraft with 118 seats – 12 in United Business and 106 in United Economy, including 40 Economy Plus extra-legroom seats.
United Airlines is Denver’s largest airline, offering more flights and more seats from the Mile High City to more destinations around the world than any other carrier. The airline offers more than 375 flights each day from Denver International Airport to more than 10 destinations in Latin America, Canada and Asia – as well as service to top business centers in North America.
United has a proud history in Denver, serving the community for over 75 years. The airline is a proud partner of the Colorado Symphony, the Denver Public Schools Foundation, the Denver Center for the Performing Arts, the Latin American Education Foundation and the Denver Broncos.
United employs more than 5,100 coworkers in the Denver area.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 737-724 N25705 (msn 28766) climbs away from Los Angeles International Airport.
AeroMexico (Mexico City) issued the following financial statement for the first quarter:
Grupo Aeromexico S.A.B de C.V. (AeroMexico) reported its unaudited consolidated results for the first quarter 2014:
- Grupo Aeromexico reported total revenues of $9.777 billion pesos; a 6.6% year-on-year increase.
- The cost of available seat kilometers (CASK) excluding fuel decreased 3.6% year-on-year in the first quarter 2014, representing the fifth consecutive quarter with a year-on-year decrease in this indicator.
- First quarter 2014 EBITDAR reached $1.393 billion pesos, with a 14.2% margin. Operating income was $31 million pesos.
- Grupo Aeromexico reported a net loss of $90 million pesos ($6.8 million) in the first quarter 2014, which compares favorably to the net loss of $122 million pesos ($9.3 million) reported in the first quarter of 2013.
- Grupo Aeromexico retired two Boeing 737-700 from its fleet, both under a pure lease agreement. Grupo Aeromexico’s operating fleet therefore consisted of 115 aircraft as of March 31, 2014.
- First quarter load factor reached 79.3%; a 5.8 percentage point increase compared to the first quarter of 2013.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 737-752 XA-MAH (msn 35122) with the special “Club Premier Credit Card” advertising markings prepares to land at Los Angeles International Airport.
Record first quarter net income, excluding special items*, of $126 million, or $.18 per diluted share, compared to first quarter 2013 net income, excluding special items, of $53 million, or $.07 per diluted share. This exceeded the First Call consensus estimate of $.16 per diluted share.
Record first quarter net income of $152 million, or $.22 per diluted share, which included $26 million (net) of favorable special items, compared to net income of $59 million, or $.08 per diluted share, in first quarter 2013, which included $6 million (net) of favorable special items.
Record first quarter operating income of $215 million; $242 million excluding special items.
Return on invested capital*, before taxes and excluding special items (ROIC), for the 12 months ended March 31, 2014, of 14.2 percent, as compared to 8.3 percent for the 12 months ended March 31, 2013.
Gary C. Kelly, Chairman of the Board, President, and Chief Executive Officer, stated, “I am delighted to report record first quarter earnings, which increased significantly year-over-year, despite the disruption caused by more than 7,500 of our flights canceled due to extreme weather conditions and the impact of the shift in timing of the Easter and Passover holidays. This outstanding performance was driven by record first quarter operating revenues of $4.2 billion, and a 1.2 percent year-over-year decline in total operating costs, excluding special items, driven largely by lower fuel prices and our ongoing fleet modernization. Our record first quarter operating income of $242 million, excluding special items, was very strong, especially considering an estimated $50 million unfavorable impact from winter storms. Operationally, our Employees did an outstanding job in difficult conditions taking care of our Customers, and I thank them again for their efforts.
“Our first quarter 2014 earnings performance is a superb start to the year and on plan to achieve a 15 percent pre-tax return on invested capital for the year, excluding special items. Second quarter 2014, benefiting from the Easter and Passover holidays, also is off to a great start, with strong bookings, favorable revenue trends, and stable fuel prices.
“Our balance sheet, liquidity, and cash flows remain strong. We are actively managing our debt and total invested capital, while making strategic investments that have already contributed significantly to our record profitability. We were pleased to return $371 million to Shareholders during first quarter 2014 through the payment of $56 million in dividends and the repurchase of $315 million in common stock. Since August 2011, we have returned $1.6 billion to our Shareholders through share repurchases and dividend payments.
“Our five strategic initiatives are on track and meeting or exceeding expectations. In January, we deployed our international reservation system and began selling Southwest’s inaugural international service to Aruba, The Bahamas, and Jamaica, scheduled to begin July 1, 2014. We quickly followed with selling Southwest service to Cancun and Los Cabos, scheduled to begin August 10, 2014. By the end of this year, we intend to fully convert AirTran’s seven international markets, along with its remaining domestic markets, to the Southwest route network. We have converted 21 of the 52 AirTran Boeing 737-700s to the Southwest Evolve configuration, and plan to convert the remaining 31 -700s this year (see below). This will complete the AirTran integration and retire the brand by the end of 2014.
“We have a significant amount of fleet activity planned this year, as we wind down the AirTran brand and continue to modernize our fleet, resulting in a larger than normal number of aircraft out of scheduled service. Accordingly, we expect relatively flat 2014 available seat miles, year-over-year.
“Our network development and optimization results, to date, have been excellent. We are excited about the opportunity to add new service to New York LaGuardia, Washington Reagan National, and Dallas Love Field this year, as well as to the international terminal under construction at Houston Hobby next year. Looking ahead to 2015, while we have not finalized our fleet and capacity plans, we have been managing to a baseline of 695 aircraft, which was our combined fleet at the time of the AirTran acquisition. We are planning year-over-year growth in our available seat miles derived from increased fleet utilization resulting from the completion of the AirTran integration and the increase in seats from the upgauging of our fleet. Of course, this will drive significant unit cost benefits.”
Financial Results and Outlook
The Company’s first quarter 2014 total operating revenues increased 2.0 percent, year-over-year, to $4.2 billion, despite an estimated $45 million reduction to revenues from weather-related cancellations. Operating unit revenues increased 3.1 percent, on a 1.1 percent decrease in available seat miles and a 2.6 percent increase in average seats per trip, all as compared to first quarter 2013. While the shift in the timing of the Easter and Passover holidays impacted March results, April bookings and revenue trends, thus far, are strong. Based on April’s trends and current bookings for the remainder of the second quarter, the Company expects another solid year-over-year increase in its second quarter 2014 operating unit revenues.
Total operating expenses in first quarter 2014 decreased 1.6 percent to $4.0 billion, as compared to first quarter 2013. First quarter 2014 total operating expenses included an estimated $5 million in net costs associated with winter storms. The Company incurred costs (before profitsharing and taxes) associated with the acquisition and integration of AirTran, which are special items, of $18 million during first quarter 2014, compared to $13 million in first quarter 2013. Cumulative costs associated with the acquisition and integration of AirTran, as of March 31, 2014, totaled $428 million (before profitsharing and taxes). The Company expects total acquisition and integration costs to be no more than $550 million (before profitsharing and taxes). Excluding special items in both periods, total operating expenses in first quarter 2014 decreased 1.2 percent to $3.9 billion, as compared to $4.0 billion in first quarter 2013.
First quarter 2014 profitsharing expense was $29 million, compared to $15 million in first quarter 2013. Profitsharing expense in first quarter 2014 was impacted by acquisition and integration costs incurred during that period. In addition, in accordance with the Company’s ProfitSharing Plan (the Plan), first quarter 2014 operating profit, as defined in the Plan, was reduced by a portion of the acquisition and integration costs incurred from April 1, 2011, through December 31, 2013, which will be amortized from January 1, 2014, through December 31, 2018.
First quarter 2014 economic fuel costs were $3.08 per gallon, including $.06 per gallon in favorable cash settlements from fuel derivative contracts, compared to $3.29 per gallon in first quarter 2013, including $.05 per gallon in unfavorable cash settlements from fuel derivative contracts. Based on the Company’s fuel derivative contracts and market prices as of April 21, 2014, second quarter 2014 economic fuel costs are expected to be comparable to second quarter 2013’s economic fuel costs of $3.06 per gallon. As of April 21, 2014, the fair market value of the Company’s hedge portfolio through 2017 was a net asset of approximately $252 million. Additional information regarding the Company’s fuel derivative contracts is included in the accompanying tables.
Excluding economic fuel and oil expense, profitsharing, and special items in both periods, first quarter 2014 operating costs increased 2.4 percent from first quarter 2013, and increased 3.5 percent on a unit basis. Based on current cost trends, the Company expects both second quarter 2014 and full year 2014 unit costs, excluding fuel and oil expense, profitsharing, and special items, to increase, year-over-year, in the two to three percent range.
Operating income for first quarter 2014 was $215 million, compared to $70 million in first quarter 2013. Excluding special items, operating income was $242 million in first quarter 2014, compared to $112 million in the same period last year.
Other income in first quarter 2014 was $29 million, compared to $24 million in first quarter 2013. The $5 million increase primarily resulted from $53 million in other gains recognized in first quarter 2014, compared to $46 million recognized in first quarter 2013. In both periods, these gains primarily resulted from unrealized mark-to-market net gains associated with a portion of the Company’s fuel hedging portfolio, which are special items. Excluding these special items, first quarter 2014 had $16 million in other losses, compared to $5 million in first quarter 2013, primarily attributable to the premium costs associated with the Company’s fuel derivative contracts. Second quarter 2014 premium costs related to fuel derivative contracts are currently estimated to be in the $15 million to $20 million range, compared to $12 million in second quarter 2013. Net interest expense in first quarter 2014 was $24 million, compared to $22 million in first quarter 2013.
Balance Sheet and Cash Flows
As of April 23, 2014, the Company had approximately $3.5 billion in cash and short-term investments, and a fully available unsecured revolving credit line of $1 billion. Net cash provided by operations during first quarter 2014 was $1.1 billion, and capital expenditures were $407 million, which included the payment for slots acquired at Washington’s Reagan National Airport. The Company repaid $46 million in debt and capital lease obligations during the first quarter 2014, and intends to repay approximately $500 million in debt and capital lease obligations during the remainder of 2014, which includes $35 million paid on April 1, 2014, associated with eight of the Company’s Fixed-rate Boeing 717 Aircraft Notes due in 2017.
During first quarter 2014, the Company generated free cash flow* of $712 million. The Company returned approximately $371 million to its Shareholders through the payment of $56 million in dividends and the repurchase of $315 million in common stock, or 12 million shares, under its share repurchase program, including $200 million under an accelerated share repurchase program with a third party financial institution. In first quarter, pursuant to the accelerated share repurchase program, the Company advanced $200 million to the financial institution and received approximately seven million shares of the Company’s common stock, representing an estimated 75 percent of the shares the Company expects to purchase under the accelerated share repurchase program. The specific number of shares that the Company ultimately will repurchase under the accelerated share repurchase program will be determined generally based on a discount to the volume-weighted average price per share of the Company’s common stock during a calculation period to be completed by May 9, 2014. At settlement, under certain circumstances, the third party financial institution may be required to deliver additional shares of common stock to the Company, or under certain circumstances, the Company may be required to deliver shares of its common stock or may elect to make a cash payment to the third party financial institution. Since August 2011, the Company has repurchased $1.48 billion in common stock, or 124 million shares, under its $1.5 billion share repurchase authorization.
During first quarter 2014, the Company’s fleet was reduced by five to 676 aircraft at period end. This reflects the first quarter 2014 delivery of two new Boeing 737-800s and six pre-owned Boeing 737-700s, as well as the retirement of one Boeing 737-300. In addition, the Company removed 12 Boeing 717-200s from service during first quarter 2014 in preparation for transition. Additional information regarding the Company’s aircraft delivery schedule is included in the accompanying tables.
Read the analysis by Bloomberg Businessweek: CLICK HERE
Top Copyright Photo: Brian McDonough/AirlinersGallery.com. Southwest’s Boeing 737-7H4 N214WN (msn 32486) completes its final turn on the river approach into Washington’s Reagan National Airport (DCA).
Bottom Copyright Photo: Ton Jochems/AirlinersGallery.com. AirTran’s Boeing 737-7BD N315AT (msn 35788) completes its final approach to the runway at Los Angeles International Airport (LAX).
Southwest Airlines (Dallas) has announced it will contribute approximately $228 million—the largest total dollar amount ever allocated—directly to Employees through its ProfitSharing Plan this year. The payment is an 88 percent increase over last year’s contribution of $121 million. Southwest was the first in the industry to offer a ProfitSharing Plan, and this is the Company’s 40th consecutive ProfitSharing payment. Through the ProfitSharing Plan, Southwest Employees currently own more than four percent of the Company’s outstanding shares.
Combined with ProfitSharing is the Company’s $269 million match and other amounts contributed to the Southwest and AirTran 401(k) plans. Southwest rewarded its Employees with a 2013 total retirement benefit of nearly $500 million. In addition to retirement contributions, Southwest Airlines also invested approximately $580 million in its Employees’ benefits during 2013, which included healthcare coverage, wellness programs, and other benefits. In total, that’s more than $1 billion dedicated to the wealth and wellbeing of Southwest Employees in 2013 alone, on top of base salaries.
Over four decades, Southwest ProfitSharing contributions have totaled $2.5 billion. In other words:
It’s enough money to buy 500 million mini bottles of founder Herb Kelleher’s drink of choice, Wild Turkey, which would fill 10 Olympic-sized swimming pools.
Or, $2.5 billion would buy 83 billion bags of Southwest peanuts—enough for 10 roundtrips to the moon if you lined them up end-to-end.
Copyright Photo: Jay Selman/AirlinersGallery.com. Boeing 737-7H4 N481WN (msn 29853) prepares to touch down in Las Vegas.
Southwest to partner with Placemaking for its “Project for Public Spaces”, WSJ takes a look at “aging” Southwest
Southwest Airlines (Dallas) announced on April 3 a multi-year commitment to Placemaking – a movement that reimagines public spaces as the heart of every community. Through the Southwest Airlines Heart of the Community program, the airline will revitalize and activate public spaces in the hearts of American cities in partnership with the pioneering nonprofit organization behind Placemaking, Project for Public Spaces (PPS).
Building upon successful pilot projects in Detroit, Michigan, and Providence, Rhode Island, in 2013, Southwest and PPS will help transform multiple public spaces in 2014 with the intent to expand the Heart of the Community program and support dozens of public spaces through Placemaking projects in the years to come.
For more than 30 years, Placemaking has sparked social, economic, and environmental benefits in communities around the world. Rooted in community-based participation, Placemaking involves the planning, design, management and programming of public spaces and capitalizes on a community’s assets and potential to create vibrant destinations—such as neighborhood parks, community markets and downtown squares.
In late 2013, Southwest provided a gift to support the MIT Department of Urban Studies and Planning’s research white paper, Places in the Making, which demonstrated the power of Placemaking to create connected, sustainable, healthy, and economically viable communities. The research emphasized Placemaking’s positive impact on community building and empowerment and cited the need for public/private partnerships to advance the practice of Placemaking.
Through the Heart of the Community program, Southwest and PPS will collaborate with local community partners in cities across the country to bring new life to their public spaces. Earlier this week, Southwest and PPS unveiled their most recent project in San Antonio, Texas, where they partnered with the Center City Development Office to activate historic Travis Park through new physical amenities, including games, umbrellas, tables and chairs and ongoing programming, such as fitness classes and live music. In 2013, Southwest and PPS worked with the Downtown Detroit Partnership to transform an underutilized lawn in downtown’s Campus Martius Park into a seasonal beach with a deck and seating that serves as a fun and relaxing community gathering place for workers, families and children. Additionally, they worked with the Downtown Providence Parks Conservancy to create the Imagination Center, a new place for family activities in Burnside Park, located in the heart of downtown Providence, R.I.
Heart of the Community is part of Southwest’s broader efforts to connect people and strengthen local communities through its core business, charitable giving, community outreach, and environmental initiatives. To read more, go to Nuts About Southwest.
Meanwhile the Wall Street Journal (WSJ) has published an article on Southwest that claims the airline is showing its age and becoming a higher cost airline.
Read the article: CLICK HERE
Copyright Photo: Jay Selman/AirlinersGallery.com. Boeing 737-7H4 N492WN (msn 33866) arrives in Las Vegas.
Scandinavian Airlines-SAS (Stockholm) is launching services between Stavanger, Norway and Houston (Bush Intercontinental) on August 20. This fulfils the wishes of leading players in the oil industry for better connections between Norway, and the rest of Scandinavia, and Houston, Texas.
The route will be operated by a business version of the Boeing 737-700 and will have an SAS Long Haul Business Class concept on board, with just 44 comfortable business seats, along with a modern inflight entertainment system and full-service meals and service.
SAS has entered into a wet lease agreement with PrivatAir (Geneva) , which has this special version of the Boeing 737-700. The aircraft will carry SAS’s distinctive colors and logo.
The route will launch on August 20, just ahead of the major oil exhibition in Stavanger, Offshore Northern Seas (ONS). Tickets for route, which will operate daily except Saturdays, go on sale on April 29.
Read the article by Bloomberg Businessweek: CLICK HERE
Top Copyright Photo: Ariel Shocron/AirlinersGallery.com. SAS’ Boeing 737-783 LN-RRB (msn 32276) approaches the runway at Madrid (Barajas).
Bottom Copyright Photo: Keith Burton/AirlinersGallery.com. PrivatAir’s Boeing 737-7AK HB-JJA (34303) arrives in Amsterdam.
AeroMexico (Mexico City) has announced the launch of its fourth daily seasonal flight between Miami and Mexico City as of April 11.
Below are the carrier’s schedules for this city pair:
|Miami – Mexico City*||Mexico City – Miami*|
|AM 433**||2:30 a.m.||5:06 a.m.||Daily||AM 432**||1:00 a.m.||4:57 a.m.||Daily|
|AM 429||7:00 a.m.||9:49 a.m.||Daily||AM 412||9:36 a.m.||1:38 p.m.||Daily|
|AM 423||3:00 p.m.||5:49 p.m.||Daily||AM 422||12:44 p.m.||4:54 p.m.||Daily|
|AM 413||6:08 p.m.||8:57 p.m.||Daily||AM 428||7:45 p.m.||11:44 p.m.||Daily|
* Times published are local to each country and are subject to change without notice.
**New seasonal flight.
All four daily flights will be operated with Boeing 737-700 aircraft configured with 124 seats, including 12 seats in AeroMexico’s Clase Premier front cabin, and will depart from Terminal H at the Miami International Airport. The terminal features benefits such as electronic check-in terminals and restaurants located close to the boarding gates.
Copyright Photo: Bruce Drum/AirlinersGallery.com. Boeing 737-752 XA-GMV (msn 35118) arrives at Miami International Airport (MIA) with a special promotional Los Cabos logo.
Southwest moves to protect its Dallas Love Field home with 12 proposed new routes if it gets two new gates
Southwest Airlines (Dallas) plans to add 20 flights to 12 new nonstop destinations if the airline is able to acquire two additional gates at Dallas Love Field. Southwest would add nonstop service to:
- Charlotte, North Carolina
- Charleston, South Carolina
- Detroit, Michigan
- Indianapolis, Indiana
- Memphis, Tennessee
- Minneapolis/St. Paul, Minnesota
- Newark, New Jersey
- Philadelphia, Pennsylvania
- Raleigh/Durham, North Carolina
- Sacramento, California
- San Francisco, California
- Seattle/Tacoma, Washington
These 12 new nonstop destinations would be added to Southwest’s schedule if the airline is able to obtain the rights to two Love Field gates that American Airlines must relinquish under the terms of a settlement with the U.S. Department of Justice. These destinations would be in addition to the 15 cities that Southwest previously announced it would serve from Love Field beginning later this year, and five new nonstop destinations currently planned for service in 2015 that Southwest has announced:
- Boston, Massachusetts (Boston Logan)
- Oakland, California
- Panama City Beach, Florida
- Portland, Oregon
- San Jose, California
With the upcoming sunset of the Wright Amendment restrictions on long-haul flights from Love Field, demand for Southwest nonstop service from the airport far exceeds the Company’s current gate capacity. Access to two additional gates would allow Southwest to provide North Texas residents and visitors with the benefits of new nonstop flights to 12 additional destinations that would not otherwise be possible – a BIG win for consumers, businesses and the Dallas-Ft. Worth area.
The Dallas-Fort Worth area is a single aviation market that is served by two airports, DFW International Airport and Dallas Love Field. In total, these airports have 175 gates (155 at DFW and 20 at Love Field). If Southwest were to acquire the two additional Love Field gates, its percentage of gates in the Dallas-Ft. Worth market would remain very small, around 10 percent. Importantly, other carriers, such as Virgin America and Delta Air Lines, already have a presence at DFW International Airport and can easily expand at DFW’s ample gate facilities. In contrast, Southwest’s growth in North Texas can occur only at Love Field under the terms of the five-party agreement that resulted in the end of the Wright Amendment.
Copyright Photo: Arnd Wolf/AirlinersGallery.com. Boeing 737-7H4 N714CB (msn 27848) is retained in the gold “Southwest Classic” classic livery. It is pictured arriving at Las Vegas.
WestJet (Calgary) will start a new route linking the Toronto (Pearson) hub with Phoenix, Arizona starting on October 26. The new route will be operated with Boeing 737-700 aircraft on a daily basis per Airline Route.
Copyright Photo: Jay Selman/AirlinersGallery.com. WestJet Airlines Boeing 737-7CT WL C-FWSO (msn 32759) plans to land in Las Vegas.
Southwest Airlines (Dallas) has announced the next phase of its international service by offering Customers new Southwest Airlines flights to both the Pacific and Caribbean coasts of Mexico, as well as other new domestic and international flying, as the carrier extended flight schedules through October 31, 2014.
Beginning August 10, 2014, Southwest Airlines will operate daily, nonstop flights between:
- Cancun, Mexico, and Atlanta, Baltimore/Washington, and (Saturdays only) Milwaukee
- San Jose del Cabo/Los Cabos, Mexico, and Santa Ana/Orange County
- Nassau, Bahamas, and (Saturdays only) Atlanta
As the planned conversion of wholly owned subsidiary AirTran Airways’ destinations continues, Southwest intends to serve five countries previously served by AirTran by the end of this year. Southwest previously announced service to Aruba, Nassau, and Montego Bay, beginning on July 1, 2014, and throughout this booking window is adding domestic connectivity through international gateway cities to many of the more than 80 cities served by Southwest Airlines across the United States.
Southwest’s phased rollout of international nonstop with domestic connecting service also brings new options for Denver customers who have made Southwest Airlines the largest air carrier in Colorado.
Beginning in October 2014, Southwest Airlines will offer nonstop service between Denver and:
- Cancun, with daily roundtrip flights beginning on October 7, 2014; and
- San Jose del Cabo/Los Cabos, with Saturday-only service beginning on October 11, 2014
Some flights will be operated by AirTran Airways which is being slowly integrated into Southwest Airlines.
Copyright Photo: Brian McDonough/AirlinersGallery.com. Boeing 737-7H4 N730SW (msn 27862) completes its final bank on the river approach into downtown Ronald Reagan Washington National Airport (DCA).
Southwest Airlines (Dallas) has signed a contract with PASSUR Aerospace to use the surface management module of the PASSUR Integrated Traffic Management system for operation at 35 U.S. airports for quicker taxi times.
PASSUR Aerospace issued this statement:
PASSUR Aerospace, Inc (OTC: PSSR), an aviation business intelligence, Big Data, software and solutions company, today announced that Southwest Airlines has contracted for the surface management module of PASSUR Integrated Traffic Management for 35 US airports across its network to streamline turn times, reduce fuel burn, and enhance on time performance.
The PASSUR Surface Management solution assists Southwest in achieving shorter taxi-in and taxi-out times, and a quicker transition from arrival to departure for an aircraft, resulting in lower costs and emissions from engine fuel burn, less time for passengers spent on the ground in the aircraft, and greater “aircraft utilization” (hours an airplane spends in the air flying passengers). The surface solution is part of an integrated, gate-to-gate traffic management platform that optimizes the entire lifecycle of a flight.
The PASSUR Surface Management solution:
- Enables real time and replayed view into how the movement of aircraft is affecting performance, including gates and taxiways
- Provides analytical tools to understand where the operation can be optimized
- Includes high resolution graphical surface flight tracking on a single, integrated display to enable seamless tracking of the surface, terminal airspace, and en route environments, for gate-to-gate tracking and management of flights. It is part of an integrated traffic management platform with multiple modules that optimize each of the key segments of a flight, gate-to-gate.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Southwest Airlines’ Boeing 737-7H4 WL N240WN (msn 32503) taxies to the departure runway at Seattle-Tacoma International Airport (SEA).
AeroMexico (Mexico City) has announced its new and exclusive Concierge service.
Passengers can purchase the service when booking their flights, for just $15 USD, to enhance their travel experience both in Mexico and abroad. The AeroMexico Concierge Service provides entertainment schedules, reservations, recommendations, locations, purchases, and other topics of interest related to
The AeroMexico Concierge service is available 48 hours prior to departure and three months thereafter.
To get this service from within Mexico call 01 800 000 4759, from the U.S. call 1 855 208 6726 from Mexico City and the rest of the world * +52 (55) 5809 4759.
In other news, AeroMexico reported a 18.8 percent increase in passengers for the month of January compared to the previous January.
Copyright Photo: Jay Selman/AirlinersGallery.com. Boeing 737-752 EI-DRE (msn 35787) with a special logo promoting the Banamex VISA card arrives in Las Vegas.
Southwest Airlines (Dallas) today announced the airline will offer new nonstop service to domestic destinations from its Dallas Love Field base following the repeal of flight restrictions imposed in 1979 limiting the reach of Dallas’ most convenient airport.
Southwest will begin serving five new nonstop destinations on October 13, 2014 followed by ten additional new nonstop destinations on November 2, 2014. The addition of these 15 new nonstop destinations will bring Southwest to a total of 31 nonstop destinations from Love Field.
“The official repeal of Wright Amendment federal flight restrictions signifies a turning point for the Southwest brand not just in Dallas, but from coast-to-coast,” said Gary Kelly, Southwest Airlines Chairman, President, and CEO. “We are pleased to offer this new service to the Customers of our home airport, who have waited 34 long years, and we thank the many, many folks who made this opportunity a reality. Goodbye, Wright Amendment. Hello, America!”
Beginning October 13, 2014, Southwest Airlines will launch nonstop service from Dallas Love Field to:
- Baltimore/Washington (BWI)
- Las Vegas
- Chicago Midway
Beginning November 2, 2014, Southwest Airlines will launch nonstop service from Dallas Love Field to:
- Washington, D.C. (Reagan National)
- Ft. Lauderdale/Hollywood
- Los Angeles (LAX)
- New York (LaGuardia)
- San Diego
- Orange County/Santa Ana
Dallas Mayor Mike Rawlings and former U.S. Senator Kay Bailey Hutchison today joined Kelly and Southwest Employees at a news conference to celebrate the momentous occasion.
The Wright Amendment, and its subsequent revisions, limit Southwest Airlines’ current nonstop all jet service from Dallas Love Field to nine states including Texas. The repeal of the federal law rewrites the map by allowing Southwest to potentially serve an additional 41 states and the District of Columbia(Reagan National airport) from Love Field.
In May, the airline will announce the specific flight schedules and fares for the sale of the new service.
Copyright Photo: Jay Selman/AirlinersGallery.com. Boeing 737-7H4 N715SW (msn 27849) dressed in the Shamu design of SeaWorld Adventure Parks, arrives in Las Vegas.
Southwest Airlines (Dallas) has confirmed it has been notified of its winning bid in an auction for 54 slots–allowing 27 additional daily flights–that will bring more competition to Reagan National Airport, three miles from downtown Washington, D.C. Details of the carrier’s bid to acquire divested slots remain confidential under terms of the deal and are subject to final approval of the Department of Justice (DOJ) and completion of customary written agreements. The additional slots will translate to an increase in Southwest’s service at Reagan National from 17 daily departures to 44 daily departures. The carrier plans to announce destinations, schedules, and fares for the additional flights later this quarter and anticipates it will begin flying in the third quarter of 2014.
The slots that Southwest will purchase at Reagan National became available as a result of a settlement of litigation last Autumn by the U.S. Department of Justice against the merger of American Airlines and US Airways. In a separate development, Southwest recently announced new service between Reagan National and Kansas City International Airport beginning Feb. 1, 2014.
In addition to Southwest’s presence at Washington Reagan National Airport (DCA) and Washington Dulles International Airport (IAD), Southwest offers the greater Baltimore/Washington region more than 200 daily departures from Baltimore/Washington Thurgood Marshall International Airport (BWI) to nearly 60 cities and, beginning on July 1, 2014, will offer new daily service on Southwest between BWI and Aruba, The Bahamas, and Jamaica, launching a new international chapter for both the carrier and Maryland’s largest airport.
Copyright Photo: Brian McDonough/AirlinersGallery.com. Boeing 737-7H4 N486WN (msn 33852) of Southwest Airlines with the “Free Bags Fly Here” sticker arrives at Washington’s Ronald Reagan National Airport on the River Approach.
Southwest Airlines (Atlanta) today announced its first-ever scheduled international flights.
Beginning July 1, 2014, Southwest Airlines will operate daily, nonstop flights between:
- Atlanta and Aruba, and Montego Bay
- Baltimore/Washington and Aruba, Nassau, and (twice daily) Montego Bay
- Orlando and (Saturday only) Aruba, and Montego Bay
In this first phase of the Company’s international conversion plan, wholly owned subsidiary AirTran Airways will continue service between Atlanta and Nassau, between Chicago Midway and Montego Bay, as well as flights to/from Cancun, Los Cabos, andMexico City, Mexico, and Punta Cana, Dominican Republic. By the end of 2014, the carrier plans to complete the launch of Southwest Airlines service to the remaining four international destinations on the Company’s network route map of 96 destinations in six countries. Both carriers’ full flight schedules are now open for booking through August 8, 2014.
The make-ready process for international service has involved nearly all of Southwest’s 45,000 Employees to implement additional technologies, training, and compliance, to obtain operational and regulatory approvals, and to ready the People, planes, and policies unique to Southwest Airlines to serve Customers in new countries.
Copyright Photo: Jay Selman/AirlinersGallery.com. Boeing 737-7H4 WL N280WN (msn 32533) in the Sea World “Penquin One” livery arrives at Las Vegas.
Southwest Airlines Company (Dallas) today reported its fourth quarter and full year 2013 results:
- Record fourth quarter net income, excluding special items*, of $236 million, or $.33 per diluted share, compared to fourth quarter 2012 net income, excluding special items, of $65 million, or $.09 per diluted share. This exceeded the First Call consensus estimate of $.29 per diluted share.
- Record fourth quarter net income of $212 million, or $.30 per diluted share, which included $24 million(net) of unfavorable special items, compared to net income of $78 million, or $.11 per diluted share, in fourth quarter 2012, which included $13 million (net) of favorable special items.
- Record full year net income, excluding special items, of $805 million, or $1.12 per diluted share, compared to full year 2012 net income, excluding special items, of $417 million, or $.56 per diluted share.
- Record full year net income of $754 million, or $1.05 per diluted share, which included $51 million (net) of unfavorable special items, compared to net income of $421 million, or $.56 per diluted share, in full year 2012, which included $4 million (net) of favorable special items.
- Return on invested capital* (before taxes and excluding special items) for full year 2013 of 13.1 percent, as compared to 7.2 percent for full year 2012.
Gary C. Kelly, Chairman of the Board, President, and Chief Executive Officer, stated, “We are happy to report full year 2013 net income of $805 million, and fourth quarter 2013 net income of $236 million, both excluding special items. We are extremely proud of these record results and the tremendous progress made on our strategic initiatives, which produced substantial returns and contributed significantly to our superb 2013 financial performance. Our full year 2013 total operating revenues were a record $17.7 billion, and our cost performance was excellent. We generated strong free cash flow* of $1.0 billion in 2013, allowing us to return $611 million to our Shareholders, through share repurchases and dividend payments, and reduce debt and capital lease obligations by $313 million. Our pre-tax return on invested capital, excluding special items (ROIC), for full year 2013 was 13.1 percent, nearly double the prior year’s performance. I want to thank the outstanding People of Southwest and AirTran. They deserve all the credit for producing these strong results, which earned them a$228 million contribution to the Profitsharing Plan for the year 2013, up 88.4 percent, or $107 million, compared to the prior year.
“We ended 2013 strong, with an exceptional fourth quarter performance. Total operating revenues were a fourth quarter record $4.4 billion, increasing 6.1 percent compared to fourth quarter last year. On a unit basis (per available seat mile), our fourth quarter 2013 revenues increased 3.8 percent year-over-year, which is remarkable considering the increase in stage length and seat density. While traffic was impacted at the beginning of the quarter by the federal government shutdown, we saw a healthy rebound in traffic and revenue trends, resulting in a five percent year-over-year increase in passenger unit revenues for the combined November/December period. Strong travel demand and favorable year-over-year unit revenues have continued in January, thus far. And, bookings for the remainder of the first quarter are strong. Based on these trends, we currently expect year-over-year growth in first quarter 2014 unit revenues.
“We also had an outstanding fourth quarter 2013 cost performance, with unit costs, excluding special items, down 2.8 percent year-over-year. We benefited from stable fuel prices, our ongoing fleet modernization efforts, and rigorous cost control efforts across the Company. We closed the year with fourth quarter 2013 economic fuel costs of $3.05 per gallon, a decline of approximately eight percent from fourth quarter 2012. Based on current market prices and our existing fuel derivative contracts, as of January 17 th, we expect first quarter 2014 economic fuel costs to be in the $3.05 to $3.10 per gallon range, which would be a significant drop year-over-year. Excluding fuel, profitsharing, and special items, our fourth quarter 2013 unit costs declined 0.4 percent year-over-year. We expect a year-over-year increase in our first quarter 2014 unit costs, excluding fuel, profitsharing, and special items.
“We are on track with our AirTran integration, achieving approximately $400 million in annual net pre-tax synergies in 2013, as planned. Since 2011, we have converted 17 of the 52 AirTran Boeing 737-700s to Southwest, and we have replaced the flying for 13 AirTran Boeing 717-200s transitioned to Delta in 2013, with Southwest 737 service. Nine more 717s were removed from active service at year end 2013, and the remaining 66 717s are scheduled to be removed from the AirTran network by the end of this year, and transitioned to Delta through 2015. The remaining 35 AirTran Boeing 737-700s are scheduled to be converted to Southwest this year. During fourth quarter, we converted Memphis, Pensacola, San Juan, and Buffalo to Southwest, and launched Southwest service to Richmond. At year end 2013, all remaining domestic AirTran markets had Southwest service. We are pleased with the rapid improvement of our developing markets as we convert AirTran routes into Southwest and optimize our combined networks. With our international reservation system scheduled for implementation later this month, we remain on track to convert AirTran’s seven international markets, along with its remaining domestic markets, by the end of this year. As planned, this will allow us to complete the AirTran integration and retire the brand by the end of 2014.
“We plan to launch international service on Southwest Airlines this year, which will be a huge milestone for us. Construction of a five-gate international facility at Houston’s William P. Hobby Airport, expected to open in late 2015, has begun, and can accommodate Southwest service to destinations in the Caribbean, Mexico, Central America, and the northern cities of South America. We also have future plans to bring Southwest near-international service to Fort Lauderdale-Hollywood International Airport (FLL). Under a recently executed agreement with Broward County, Florida, which owns and operates FLL, we will oversee and manage the design and construction of the airport’s Terminal 1 Modernization Project. In addition to significant improvements to the existing Terminal 1, the project includes the design and construction of a new five-gate Concourse A with an international processing facility.
“During 2014, we expect to take delivery of 33 new Boeing 737-800s and 12 pre-owned -700s, which will allow us to keep our 2014 capacity relatively flat, year-over-year, as we continue to transition the AirTran 717 fleet to Delta, and retire Classic Boeing 737 aircraft. We continue to optimize the combined Southwest and AirTran route networks, and announced new travel options in 2014 to some of our Customers’ favorite domestic destinations, like San Diego and Portland, Oregon. We also look forward to expanding service to Dallas Love Field, with the October 2014 repeal of the Wright Amendment.
“We are excited about bringing more flights to New York’s LaGuardia Airport with our recent acquisition of 12 takeoff and landing slots, pursuant to American Airlines’ required divestiture for its merger with US Airways. In addition, we gained permanent control of 10 takeoff and landing slots at LaGuardia that Southwest currently operates under lease from American. In an effort to bring more low fares to Washington’s Reagan National Airport, we also have bid on slots that American is required to divest.
“We enter 2014 financially strong and excited about the opportunities unfolding. We are proud of our many 2013 accomplishments, most notably our strong financial performance that we believe positions us well to achieve our targeted 15 percent ROIC in 2014. As ever, we remain focused on providing job security for our Employees; providing friendly, reliable and low-fare service to our Customers; and enhancing Shareholder value.”
Notable 2013 accomplishments for Southwest Airlines include:
- Achieved 41st consecutive year of profitability, with record profits
- Achieved 13.1 percent return on invested capital (before taxes and excluding special items)
- Contributed $228 million to the Profitsharing Plan, an increase of $107 million
- Returned $611 million to Shareholders through repurchases of $540 million of common stock (38 million shares) and distribution of $71 million in dividends
- Reduced long-term debt and capital lease obligations by $313 million
- Deferred $1 billion in aircraft capital spending to beyond 2018
- Received numerous awards and recognitions, most notably being recognized as the Best Domestic Airline for Customer Service by Executive Travel Magazine’s Leading Edge Awards, named Brand of the Year in the Value Airline Category by the Harris Poll, and recognized with the top ranking by InsideFlyer Magazine for Best Customer Service and Best Loyalty Credit Card
- For the 17th consecutive year, Southwest Airlines Cargo received the 2013 Quest for Quality Award, awarded by Logistics Management Magazine
- Launched the first Southwest destination outside the 48 contiguous states with service to San Juan, Puerto Rico
- Completed the connection between the Southwest and AirTran networks
- Expanded Southwest Cargo to the AirTran network
- Ended the year with Southwest service in all domestic AirTran airports
- Launched AirTran service to Hartford and Oklahoma City
- Completed the 143-seat Evolve retrofit of 372 Southwest 737-700s and 78 737-300s
- Converted 6 of the 52 AirTran 737-700s to the Southwest livery with Evolve configuration, bringing cumulative conversions to 17
- Transitioned 13 of the 88 AirTran 717-200s to Delta Air Lines
- Reached a cumulative 65 percent of the AirTran workforce converted to Southwest, with the remaining flight crews and dispatchers scheduled to transition in 2014
- Completed equipping all -700 and -800 aircraft with satellite-based WiFi (including completed AirTran conversions) and became the first and only carrier to offer gate-to-gate connectivity
- Partnered with DISH to offer “TV Flies Free” in second half 2013; DISH sponsorship was recently extended through 2014
- Launched movies on demand, a new WiFi portal, and Messaging feature for iOS users
- Remained on track to implement Southwest’s International Reservation system in January 2014
- Broke ground on the five-gate, international facility at Houston’s William P. Hobby Airport, planned to open in late 2015
- Acquired 12 slots (for six roundtrip flights) at New York’s LaGuardia Airport and permanently secured 10 slots (five roundtrip flights) that are currently being operated by Southwest
- Joined the Transportation Security Administration’s (TSA) expedited screening program known as TSA Pre Check™
The Company’s fourth quarter 2013 total operating revenues increased 6.1 percent to $4.4 billion, while operating unit revenues increased 3.8 percent, on a 2.2 percent increase in available seat miles and a 3.0 percent increase in average seats per trip, all as compared to fourth quarter 2012. Based on current revenue and booking trends, the Company expects year-over-year growth in its first quarter 2014 unit revenues.
Total operating expenses in fourth quarter 2013 decreased 1.0 percent to $4.0 billion, as compared to fourth quarter 2012. The Company incurred costs (before taxes) associated with the acquisition and integration of AirTran, which are special items, of $19 million during fourth quarter 2013, compared to $14 million in fourth quarter 2012. Excluding special items in both periods, total operating expenses of $4.0 billion in fourth quarter 2013 were comparable to fourth quarter 2012.
Fourth quarter 2013 economic fuel costs were $3.05 per gallon, including $.03 per gallon in favorable cash settlements from fuel derivative contracts, compared to $3.32 per gallon in fourth quarter 2012, including $.09per gallon in unfavorable cash settlements from fuel derivative contracts. Based on the Company’s fuel derivative contracts and market prices as of January 17 th, first quarter 2014 economic fuel costs are expected to be in the $3.05 to $3.10 per gallon range, which is significantly below first quarter 2013’s economic fuel costs of $3.29 per gallon. As of January 17 th, the fair market value of the Company’s hedge portfolio through 2017 was a net asset of approximately $108 million. Additional information regarding the Company’s fuel derivative contracts is included in the accompanying tables.
Excluding economic fuel expense, profitsharing, and special items in both periods, fourth quarter 2013 operating costs increased 1.8 percent from fourth quarter 2012, and decreased 0.4 percent on a unit basis. Based on current cost trends, the Company expects first quarter 2014 unit costs, excluding fuel, profitsharing, and special items, to increase from first quarter 2013’s 8.21 cents, with full year 2014 unit costs, excluding fuel, profitsharing, and special items, expected to increase year-over-year in the two to three percent range.
Fourth quarter 2013 operating income was a fourth quarter record $386 million, compared to $91 million in fourth quarter 2012. Excluding special items, fourth quarter 2013 operating income was also a fourth quarter record $418 million, compared to $136 million in the same period last year.
Other expenses in fourth quarter 2013 were $52 million, compared to other income of $34 million in fourth quarter 2012. This $86 million swing primarily resulted from $27 million in other losses recognized in fourth quarter 2013, compared to other gains of $62 million recognized in fourth quarter 2012. In both periods, these gains/losses included unrealized mark-to-market gains/losses associated with a portion of the Company’s fuel hedging portfolio, which are special items. Excluding these special items, fourth quarter 2013 had $21 million in other expenses, compared to $3 million in fourth quarter 2012, primarily attributable to the premium costs associated with the Company’s fuel derivative contracts. First quarter 2014 premium costs related to fuel derivative contracts are currently estimated to be in the $10 million to $20 million range, compared to $5 millionin first quarter 2013. Net interest expense in fourth quarter 2013 was $25 million, compared to $28 million in fourth quarter 2012.
For 2013, total operating revenues increased 3.6 percent to $17.7 billion, while total operating expenses of$16.4 billion were comparable to 2012. Operating income for 2013 was a record $1.3 billion, compared to $623 million for 2012. For 2013, special charges (before taxes) associated with the acquisition and integration of AirTran were $86 million. Cumulative costs associated with the acquisition and integration of AirTran, as of December 31, 2013, totaled approximately $410 million (before profitsharing and taxes). The Company expects total acquisition and integration costs to be no more than $550 million (before profitsharing and taxes). Excluding special items in both periods, operating income was a record $1.4 billion for 2013, compared to $838 million for 2012.
As of January 22, the Company had approximately $3.1 billion in cash and short-term investments, and a fully available unsecured revolving credit line of $1 billion. Net cash provided by operations during fourth quarter 2013 was $302 million, and capital expenditures were $451 million. For 2013, net cash provided by operations was $2.49 billion, and capital expenditures were $1.45 billion, resulting in free cash flow of approximately $1.04 billion. The Company currently estimates its 2014 capital expenditures to be in the $1.5 billion to $1.6 billion range. The Company repurchased $540 million in common stock, or 38 million shares, during 2013. Since August 2011, the Company has repurchased $1.2 billion, or 111 million shares, of common stock under its $1.5 billion share repurchase authorization. This reduced the Company’s outstanding common stock by approximately 14 percent. The Company repaid $313 million in debt and capital lease obligations during 2013, and is currently scheduled to repay approximately $550 million in debt and capital lease obligations during 2014.
Copyright Photo: Jay Selman/AirlinersGallery.com. Southwest Airlines’ Boeing 737-7H4 WL N945WN (msn 36660) in the Florida One scheme approaches the runway at Las Vegas’ McCarran International Airport.
Airberlin (airberlin.com) (Berlin) has issued this statement outlining its plans for its upcoming summer schedule:
Airberlin will be expanding its tourist travel services this summer and including more destinations in its schedule. “Tourist flights are an important pillar in our business model and we are constantly improving our services. With Larnaca and Malta, we have included new destinations in our portfolio and we are increasing the frequency of flights, especially to Greece and the Canary Islands,” says Detlef Altmann, Senior Vice President Sales Touristic Services. The frequency of flights to Greece has increased by 11% compared with summer 2013, to 172 flights a week. Flights to the Canary Islands have increased by 12%, with 73 connections a week in summer 2014.
Next summer, Airberlin will be offering seven additional flights a week to the airport of Heraklion on Crete. For tourists wishing to travel to Kos and Santorini, there will be three more flights a week to each destination, meaning that airberlin will be flying seven times a week to Santorini and 21 times a week to Kos. There will be one extra flight a week to each of Chania, Kalamata, Lesbos, Mykonos, Rhodes, Samos and Zakynthos.
The number of flights a week to Lanzarote will increase by three compared with last year, to 13. airberlin will fly 16 times a week to Gran Canaria and 25 times a week to Tenerife South. Two flights a week have been added to each destination. The number of weekly flights to Fuerteventura is up from 17 to 18. There will be more Airberlin flights from Munich, with new services to the Canary Island destinations of Gran Canaria, Lanzarote and Tenerife South.
For the first time, Airberlin’s summer schedule offers flight guests from Dusseldorf a weekly service to Corsica and several flights a week to Madrid.
The tourist services for people travelling from Vienna have been extended, with new services to Madrid, Malta and Larnaca on Cyprus. There are excellent connections from Berlin, Dusseldorf, Hanover, Hamburg, Munich and Nuremberg for the newly introduced flights from Vienna to Malta and Larnaca.
Airberlin also offers a regular schedule of long-haul tourist flights, including to Curaçao, Cuba, Mexico, the Dominican Republic, Fort Myers, Miami, New York (JFK) and the Thai holiday island of Phuket, with feeder flights from many airports in Germany, Austria and Switzerland. airberlin flies daily from Berlin and Dusseldorf to Abu Dhabi and, with its strategic partner, offers connecting services, for example to Bangkok, Sri Lanka, the Maldives and the Seychelles. Even Australia can be reached with Airberlin and Etihad Airways via Abu Dhabi, making this the shortest one-stop service from Germany to down under.
Copyright Photo: Paul Bannwarth/AirlinersGallery.com. Boeing 737-76J D-ABLE (msn 36873) approaches the runway at Zurich.
Southwest Airlines (Dallas) recently inherited Branson, Missouri from its subsidiary AirTran Airways and some of its pilots may not be as familiar with Branson Airport (IATA: BKG, ICAO: KBBG, FAA LID: BBG) as other long-time Southwest-served airports. The airport opened on May 11, 2009 and is privately owned by Branson Airport, LLC.
Apparently the crew of flight WN 4013 last night (January 12) from Chicago (Midway) to Branson were a bit unfamiliar with the area. The Boeing 737-700 with 124 passengers and five crew members mistakenly landed at M. Graham Clark Downtown Airport (IATA: PLK, ICAO: KPLK, FAA LID: PLK) in Branson. The downtown airport has one runway designated 12/30 with an asphalt surface measuring 3,738 by 100 feet (1,139 x 30 m) according to Wikipedia. PLK is owned and operated by Taney County.
The aircraft involved is Boeing 737-7H4 N272WN (msn 32527). The aircraft will be ferried out of PLK with only a crew.
Read the full report (with video) from OzarksFirst.com: CLICK HERE
Fiji Airways (2nd) (Nadi, Fiji) has announced the introduction of two new nonstop international services from the Fijian capital of Suva.
From May 2014, Fiji Airways will offer twice–weekly nonstop flights between Suva and Sydney, operated by its Boeing 737-700 aircraft, and between Suva and Apia, operated by Pacific Sun’s soon-to-arrive ATR 72 aircraft.
The direct services between Suva and Sydney will operate on Mondays and Friday, with a convenient midday departure from Suva, and an afternoon departure from Sydney.
The new introduction means Fiji Airways will offer three flights from Sydney to Fiji on Mondays and Fridays, with the two current flights to Nadi and the new direct Suva flight from May 2014.
The new schedule means a change to the Suva-Auckland services, allowing for a late evening Suva-Auckland service on Mondays and Fridays, and a morning Auckland-Nadi service on Tuesdays and Saturdays. The new schedule will improve connectivity with ferries and flights to the outer islands for passengers arriving from Auckland.
“The 8 am departures from Auckland to Nadi two times a week mean New Zealanders will now be able to easily travel to the North and the outer islands, allowing them to enjoy the amazing beauty of these regions on the day they arrive,” says Mr Pichler.
The Suva-Apia services will operate late nights on Mondays and Fridays, while the return Apia-Suva flights will operate in the mornings of Tuesday and Saturday. This will now allow Apia passengers to connect on a Fiji Airways service to Auckland, Sydney, Brisbane or Nuku’alofa (Tonga) on the same day.
Pichler explained the strategy behind the expansion in Suva: “As Nadi is our traditional leisure hub, Suva will more and more grow into our business hub.” It is a dual hub strategy where there is one winner – our customers.
Copyright Photo: John Adlard/AirlinersGallery.com. Under a rainbow, Boeing 737-7X2 DQ-FJF (msn 28878) is pictured in action at Sydney.
AeroMexico (Mexico City) has applied to the Corporacion Quiport, the company operating the concession for Mariscal Sucre International Airport, its new proposed new daily service to Quito from Mexico City.
The new route will be flown with Boeing 737-700 aircraft, with a capacity for 124 passengers, 12 in First Class.
AeroMexico is proposing the following schedule:
Quito – Mexico City
|Mexico City – Quito|
|08:30 a.m.||12:15 p.m.||Daily||AM 684||11:50 p.m.||05:23 a.m.||Daily|
*Schedules are published in the local time of each country, and are subject to change without prior notice.
In other news, AeroMexico and Gogo, the world leader of in-flight connectivity and a pioneer in wireless in-flight digital entertainment solutions, announced today that they have agreed on the principal terms and conditions relating to providing in-flight Internet and wireless in-flight entertainment service – Gogo Vision – on at least 75 aircraft.
Copyright Photo: Eddie Maloney/AirlinersGallery.com. Boeing 737-752 WL XA-VAM (msn 34295) lands at Las Vegas still painted in the old 1999 livery.
Southwest Airlines (Dallas) has acquired 12 takeoff and landing slots (for six roundtrip flights) at New York’s LaGuardia Airport (LGA) being divested by American Airlines (Dallas/Fort Worth) as part of its merger with US Airways (Phoenix). In addition, Southwest gained permanent control of 10 takeoff and landing slots (for five roundtrip flights) that it currently operates under a lease from American. Details of the transactions are confidential. Southwest plans to begin its new service at LGA in May 2014. Details of the new service will be available later this month.
Southwest and its subsidiary AirTran Airways currently operate 27 daily roundtrip flights to and from LGA to eight nonstop destinations. The acquired slots will allow the airlines to add six daily roundtrips.
Southwest currently serves Newark Liberty International, LaGuardia Airport, and Long Island MacArthur Airport. These six additional roundtrips at LGA will strengthen Southwest’s service to and from the New York City area.
In other news, Southwest Airlines announced its decision to close three cities in the airline’s network. On June 7, 2014, Southwest will cease operations at Branson Airport (BKG), Key West International Airport (EYW), and Jackson-Evers International Airport (JAN). Southwest began service to Jackson-Evers International in 1997. The airline added Branson Airport and Key West International Airport to its route map in 2012 as part of its integration with AirTran, a wholly-owned subsidiary.
“Unfortunately, the level of local demand no longer allows Southwest to profitably serve these markets,” said Bob Jordan, Southwest’s Executive Vice President and Chief Commercial Officer. “Southwest takes pride in becoming not only a great choice for air travel in the cities we serve, but we also become a member of the community. These decisions are never easy.”
Over the next six months, Southwest will operate its full schedule at each of these cities, and there will be no disruption to reservations for travel through June 6, 2014.
Copyright Photo: Bruce Drum/AirlinersGallery.com. Southwest Airlines retains one Boeing 737-700 in a gold “Southwest Classic” version of the original 1971 color scheme. Boeing 737-7H4 N714CB (msn 27848) taxies at Seattle-Tacoma International Airport.
Delta Air Lines (Atlanta) plans to add 18 daily nonstop flights to five destinations from Dallas Love Field in October 2014.
According to the airline, Delta’s planned expansion will enhance competition at the airport with new nonstop service to New York-LaGuardia, Los Angeles, Detroit, and Minneapolis-St. Paul. Delta also will add two daily flights to its existing Atlanta service.
Delta will require access to gates at Love Field in order to operate its expanded schedule. Delta has asked the U.S. Department of Justice to allow it to bid on Love Field gates as part of the divestiture of airport assets under a proposed settlement agreement with American Airlines and US Airways.
Currently at Love Field, 16 of the 20 gates and more than 95 percent of available seats are controlled by one airline, Southwest Airlines, which transports more passengers in the U.S. than any other carrier. Love Field has one of the highest concentrations of operations controlled by a single airline among the nation’s large airports.
The expanded Love Field service builds on Delta’s recent growth at Dallas/Fort Worth International Airport, where it currently operates 45 peak-day flights to eight destinations. Last year, Delta added new nonstop service between DFW and New York-LaGuardia. It also operates nonstop flights from DFW to Atlanta, Minneapolis-St. Paul, Detroit, Salt Lake City, Cincinnati, Memphis and New York-JFK.
When the expansion is complete, Delta would operate a total of 68 daily flights in the Dallas/Fort Worth region, including flights at both DFW and Love Field.
Delta’s expansion will be implemented following changes to the Wright Amendment, which previously restricted Love Field service to Texas, adjacent states and Missouri, Alabama, Kansas and Mississippi. Those restrictions are scheduled to end in October 2014.
Copyright Photo: Brian McDonough/AirlinersGallery.com. Boeing 737-732 N302DQ (msn 29648) prepares to land at Dulles International Airport near Washington.
Southwest Airlines (Dallas) today (September 30) broke ground on a new international terminal at William P. Hobby Airport (HOU), marking the official start of construction on the $156 million project.
Once completed, the five-gate facility will accommodate regional international flights for Southwest Airlines, with service reaching destinations in the Caribbean, Mexico, and the northern cities of South America.
Houston Mayor Annise Parker, as well as local and state dignitaries, joined Southwest Airlines Employees in the brief ceremony before work immediately began.
A 2012 study commissioned by the Houston Airport System indicates that the new terminal will generate more than 10,000 jobs across the Greater Houston metropolitan area and will provide an economic impact of $1.6 billion. The study estimates that the terminal will bring in an additional 1 million passengers a year to Hobby Airport.
The terminal project, fully funded by Southwest Airlines, includes a new five-gate international terminal, expansion of the existing security checkpoint, and upgrades to the Southwest Airlines ticketing counter area.
In support of the project, and in anticipation of the expected increase in passenger traffic, the Houston Airport System will be making significant investments of its own, constructing a new multi-level parking garage and making improvements to the existing roadway system.
Southwest Airlines anticipates its first international flights out of Houston Hobby’s new international terminal will begin in late 2015 to destinations in the Caribbean, Mexico, and the northern cities of South America.
Copyright Photo: Fernandez Imaging/AirlinersGallery.com. Boeing 737-7H4 N279WN (msn 32532) with the special “Summer of Love – Cirque du Soleil” emblem taxies at the Houston (Hobby) hub.
WestJet (Calgary) has announced it has entered into a definitive purchase agreement for 65 737 MAX aircraft from Boeing. This order was previously announced on August 29, 2013 as a letter of intent (LOI) to purchase.
This purchase agreement includes commitments for 25 MAX 7 and 40 MAX 8 aircraft with substitution rights to the 737 MAX 9, with deliveries scheduled from 2017 through 2027. As previously announced, the airline will substitute 15 of its existing Boeing Next-Generation 737 aircraft orders currently scheduled to deliver between December 2014 and 2018, with Boeing 737 MAX aircraft, for a net increase of 50 committed deliveries to its fleet plan. (See the updated Boeing Fleet Plan Schedule below).
|Year||WestJet Boeing Fleet Schedule|
|Boeing 737 Commitments a b||Total
|700 d||800||MAX 7||MAX 8|
|(a)||As of September 26, 2013.|
|(b)||WestJet also has options to purchase an additional 10 Boeing 737 MAX aircraft between the years 2020 and 2021.|
|(c)||Sale of 10 Boeing 737-700 aircraft to Southwest Airlines as announced on May 7, 2013.|
|(d)||WestJet has an option to convert any of these 737-700 Next Generation future commitments to 737-800 Next Generation aircraft.|
|(e)||WestJet expects to renew one of the three lease renewal options on its Boeing 737 aircraft set to expire in 2014.|
|(f)||Based on total commitments and lease renewal options, WestJet’s fleet could be as large as 162 737 Boeing aircraft or as few as 120 737 Boeing aircraft by 2023.|
Copyright Photo: Michael B. Ing. WestJet is selling 10 Boeing 737-700s to Southwest Airlines and will phase out the type in 2017. Boeing 737-7CT C-GWJO (msn 33969) approaches the runway at Los Angeles International Airport.
Air Lease Corporation has announced the long term lease of one Boeing 737-700 jet aircraft (msn 33015) to Airzena Georgian Airways (Tbilisi, Georgia). The aircraft is scheduled for delivery in October, 2013.
Airzena Georgian Airways is the designated national airline of Georgia, operating extensive scheduled services to many destinations in Europe, the Mediterranean, the Middle East and Russia, with Boeing 737s and CRJ regional jets.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. The carrier already operates the type but the new addition will replace an older Boeing 737-500. Boeing 737-790 WL 4L-TGM (msn 33012) taxies at Amsterdam.
Copyright Photo: Paul Bannwarth/AirlinersGallery.com. Operated by Germania for Airberlin, Boeing 737-75B D-AGEN (msn 28100) approaches Zurich for landing.
Boeing (Chicago), China’s leading provider of passenger airplanes, projects a demand for 5,580 new airplanes in China over the next 20 years valued at $780 billion. The company’s annual China Current Market Outlook forecasts the country’s fleet to triple in size over the next two decades.
Tourism in China and intra-Asia travel will help spur a strong demand for single-aisle airplanes, with total deliveries in that segment reaching 3,900 through 2032. Tinseth said both the Next-Generation 737 and the new 737 MAX offer significant advantages in improved capabilities, fuel efficiency and maintenance costs, as well as enhanced environmental performance.
Long-haul international traffic to and from China is forecasted to grow at an annual rate of 7.2 percent. The international growth is primarily driven by anticipated passenger traffic between China and North America, Europe, the Middle East, Oceania and Africa. This growth in the long-haul segment is expected to result in demand for an additional 1,440 new fuel-efficient widebodies, such as the 787 Dreamliner, 777 and 747-8 Intercontinental.
New Airplane Deliveries to China: 2013-2032
|Airplane type||Seats||Total deliveries||Dollar value|
|Regional jets||90 and below||240||$10B|
|Large wide-body||400 and above||100||$30B|
(16% of world total)
(16% of world total)
Boeing projects investments of $4.8 trillion worldwide for more than 35,000 new commercial airplanes to be delivered during the next 20 years. The complete forecast is available at www.boeing.com/commercial/cmo/index.html. China accounts for approximately 16 percent of the total demand in terms of both new deliveries and market value.
Top and Bottom Copyright Photos: Ivan K. Nishimura/Blue Wave Group. China Southern Airlines‘ Boeing 737-71B B-5283 (msn 38919), the 4,000th Next Generation 737, passes through Honolulu on its long delivery flight to China.
Southwest Airlines (LUV) has announced the flight attendants from AirTran Airways (Dallas), a wholly-owned subsidiary of Southwest Airlines Company, have reached a tentative agreement on the collective bargaining agreement that became amendable in May 2013. AirTran flight attendants are represented by the Association of Flight Attendants-CWA (AFA). This tentative agreement still requires membership ratification.
The parties have been in discussions since February 2013 on an agreement that would serve as a bridge for the AirTran flight attendants until they ultimately transition to Southwest Airlines. To date, more than 400 flight attendants have made the transition, while approximately 1,700 flight attendants remain in the AirTran partition. Southwest Airlines finalized the closing of the acquisition of AirTran Holdings, Inc., on May 2, 2011.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. The AirTran Boeing 737-700 fleet is also gradually transitioning to Southwest. The pictured 737-76N N279AT (msn 32666) is now N7719A with Southwest.
Have you seen the “new look” AirlinersGallery.com?
Germania Fluggesellschaft (Berlin-Tegel) will become the first airline to operate from the delayed Flughafen Berlin Brandenburg (BER).
The airline will move to BER on November 1, 2013 from its previous home at Tegel Airport and the adjacent Schönefeld Airport, operating from the north pier. A detailed schedule will be announced separately.
Germania in the winter timetable 2013/2014 will operate from Berlin twice-weekly to Skopje in Macedonia and to Beirut in Lebanon, and once a week to Adana in Turkey. Germania will also start charter flights to the Canary Islands, Egypt and the United Arab Emirates from BER.
The airline currently operates 8 Airbus A319s and 10 Boeing 737-700s.
Top Copyright Photo: Paul Bannwarth/AirlinersGallery.com. Boeing 737-75B D-AGER (msn 28107) prepares to land at Frankfurt.
Bottom Copyright Photo: Flughafen Berlin Brandenburg (BER). The new terminal at BER.
Southwest Airlines’ (Dallas) flight WN 345 from Nashville to New York (LaGuardia) operated with Boeing 737-7H4 N753SW (msn 29848) skidded off the runway last night (July 22) on landing at LGA ending up in the grass. After touchdown the nose wheel collapsed on landing, pressing back into the fuselage. Three passengers and five crew members were transported to a local hospital due to back and neck pain. The incident closed the airport and caused severe delays.
Southwest Airlines issued this statement:
Southwest Airlines flight 345 landed at New York’s LaGuardia at 5:40 PM Eastern Monday evening from Nashville. There were 150 people on board including Customers and Crew. Three Customers and five Crew Members were transported to local hospitals—all have been treated and released.
The aircraft, a Boeing 737-700, was last inspected July 18, 2013. The aircraft entered service in October 1999. Southwest is working with both the NTSB and Boeing in a preliminary investigation of this event.
Overnight, the aircraft was removed from the runway. Southwest has resumed full operations at LaGuardia.
We express our utmost gratitude to emergency responders and Southwest Employees who assisted us last night.
In other news, Southwest announced it will introduce new service between Hartsfield-Jackson Atlanta International Airport and Ronald Reagan Washington National Airport, beginning on February 13, 2014.
The new route is the next step in the integration process between Southwest Airlines and its wholly owned subsidiary, AirTran Airways. Hartsfield-Jackson Atlanta International is AirTran’s top airport in terms of daily departures, and Reagan National ranks eighth. In addition to the once-daily Southwest flight between Atlanta and Washington, D.C., AirTran will continue to operate five daily nonstop flights between the cities.
Southwest is also introducing a new nonstop flight between Baltimore/WashingtonInternational Airport and Dayton International Airport on February 13. Seasonal service between Reno/Tahoe and Chicago (Midway), Las Vegas and Albany, and Long Island MacArthur and Ft. Myers will resume on February 13, 2014.
Top Video: This video shows the aircraft landing.
Southwest Airlines (Dallas) and SeaWorld Parks & Entertainment™ (SEAS) celebrated 25 years of partnership today with the unveiling of the airline’s newest specialty aircraft, Penguin One— Boeing 737-7H4 N280WN (msn 32533) co-branded with images of one of SeaWorld®’s iconic animals.
Southwest and SeaWorld revealed the aircraft at a ceremony this morning at Orlando International Airport (MCO) with real penguins, Southwest and SeaWorld Employees, community members, and executives including Southwest Airlines Chairman, President, and CEO Gary Kelly and SeaWorld Parks & Entertainment President and CEO Jim Atchison. The plane, filled with Southwest and SeaWorld employees, also made stops in two other SeaWorld cities, San Antonio and San Diego.
The partnership between the two companies dates back to 1988, which began when SeaWorld opened in San Antonio. Southwest and SeaWorld launched their partnership in a high-flying way—with the introduction of a new Boeing 737, Shamu® One!
The featured penguin species on the aircraft is a gentoo, one of the species found at SeaWorld Orlando’s new Antarctica: Empire of the Penguin™. The attraction includes a first-of-its-kind family ride that transports guests into the penguins’ icy world.
This morning’s ceremony celebrated the introduction of Penguin One in a spirited way as attendees waved black-and-white pom poms, enjoyed black-and-white-themed snacks, and cheered as executives christened the aircraft while SeaWorld‘s Pete and Penny Penguin looked on.
Penguin One joins 12 other 737s in the Southwest fleet that carry a unique paint scheme: Shamu One, Shamu Two, Arizona One, California One, Colorado One, Florida One, Illinois One, Lone Star One (Texas), Maryland One, Nevada One, New Mexico One, and Triple Crown One (unveiled in 1997).
From the “Nuts About Southwest” blog (all photos by Southwest Airlines):
We kicked off Penguin One’s debut at Orlando International Airport (MCO) with more than 500 local Employees and community leaders, along with Southwest Airlines Chairman, President, and CEO Gary Kelly, and SeaWorld Parks & Entertainment CEO, Jim Atchison (shown below). Also on hand to meet the newest member of the family were famous SeaWorld mascots Pete and Penny Penguin, Penguin One’s real life counterparts (We think we got their approval!).
We had a lot of fun with our “Tuxedo” theme, as attendees waved black and white pom-poms, snacked on black and white themed snacks, and cheered as Kelly, Atchison, Pete and Penny, and the SeaWorld Aviculturists officially christened the aircraft. The celebration may have started in Orlando, but it didn’t end there! A team made up of Southwest Airlines and SeaWorld Employees boarded Penguin One and took the party to two other SeaWorld cities—San Antonio and San Diego—to celebrate with local Employees.
In 1988 when SeaWorld® opened in San Antonio, two great companies in the tourism world launched a new partnership in a high-flying way with the introduction of three co-branded 737 jets; Shamu One, born May 23, 1988; Shamu Two, born May 30, 1990; and Shamu Three, born September 7, 1990. Upon the retirement of Shamu One, we’re excited to welcome Penguin One to our fun fleet of SeaWorld specialty planes!
Penguin One Fun Facts:
- Born: June 20, 2013
- Hometown: Spokane, WA
- Resides in: 97 destinations in 41 states, the District of Columbia, the Commonwealth of Puerto Rico, and six near-international countries
- Length: 110 feet, 4 inches
- Weight: 84,100 lbs.
- Parents: Southwest Airlines Employees
- Seats: 143
- Hobbies include: Flying high, keeping Southwest Airlines’ Customers comfortable, and displaying a strong relationship between Southwest Airlines and SeaWorld Parks & Entertainment
- The largest penguin on Penguin One is over 26 feet long
Painting Process Facts:
- Penguin One is painted in seven different colors
- Nine day paint operation (24 hours around the clock) compared to the three day turnaround for our standard paint scheme
- 35 people over three shifts
- 100 gallons of paint applied to the fuselage
- The Gentoo penguins on Penguin One vary in length from 12 feet to more than 26 feet, about five to ten times the size of the average Gentoo penguin! The aircraft is also covered with a clear coat of paint to protect the design and keep Penguin One looking great for years to come.
Meet the Rest of Our Specialty Fleet
- Shamu Two – May 30, 1990
- Shamu Three – Sept. 7, 1990
- Lone Star One – Nov. 7, 1990
- Arizona One – May 23, 1994
- Triple Crown – June 9, 1997
- California One – Sept. 19, 1998
- Nevada One – June 12, 1999
- New Mexico One – Sept. 18, 2000
- Maryland One – June 14, 2005
- Illinois One – April 14, 2008
- Florida One – April 23, 2010
- Colorado One – August 22, 2012
Southwest Airlines (Dallas) yesterday (August 22) introduced its latest state logojet (N230WN) named “Colorado One” in support of its operations at Denver International Airport.
The company issued the following statement:
“Southwest Airlines is taking its “LUV” for the state of Colorado to new heights by unveiling Colorado One, a Boeing 737-700 emblazoned with an artist’s rendition of the Colorado state flag! Southwest unveiled the newest specialty aircraft in the carrier’s fleet at a ceremony at Denver International Airport (DIA) with more than 500 local employees and community leaders, along with Colorado Governor John Hickenlooper, Denver Mayor Michael B. Hancock, and Manager of Aviation for Denver International Airport, Kim Day.
The ceremony included attendees waiving Colorado flags, enjoying locally-made granola snacks, and cheering as Kelly, Governor Hickenlooper, Mayor Hancock, and Day closed the event by christening the aircraft amid fan-fare.
Southwest Airlines began service to Denver on Jan. 3, 2006, with 13 daily nonstop departures to three destinations. The airline currently operates 168 daily nonstop flights to 54 destinations from Denver.
Copyright Photo: Southwest Airlines. Boeing 737-7H4 N230WN (msn 34592) is also the 5,000th Boeing 737 built, a significant milestone aircraft.
Southwest-AirTran Destination Map:
International Lease Finance Corporation (ILFC) (Los Angeles), a wholly owned subsidiary of American International Group, Inc. (AIG), has announced it delivered a Boeing 737-700 aircraft to Eznis Airways (Ulaanbaatar), the largest Mongolian privately owned airline.
The new aircraft will expand Eznis Airways’ international operations and be used to better serve the country’s rapidly growing air traffic demand. As of the first quarter of 2012, inbound and outbound international traffic in Mongolia has increased by 30% compared to the same period last year.
Eznis Airways currently owns the largest air fleet in Mongolia and the addition of this Boeing-manufactured airplane marks its 7th aircraft. The 737 series is a medium-range twin-engine narrow-body jet airliner and is the best-selling jet airliner in the history of aviation. The aircraft can fly nonstop to Beijing, Seoul, Tokyo and Hong Kong from Ulaanbaatar.
Eznis Airways was established on January 6, 2006 by Newcom Group, one of the largest holding companies of Mongolia. The airline operates domestic scheduled and charter flights to 11 destinations in 9 aimags (provinces) of Mongolia and operates international scheduled service to Hailar in China’s Inner Mongolia region and Ulan-Ude in Russian Federation’s Buryat Republic, and charter services to points in China, Russia and Kazakhstan.
Copyright Photo: ILFC. Formerly operated by Copa Airlines as HP-1528CMP, Boeing 737-7V3 JU-9921 (msn 29360, ex N201LF) was officially handed over to Eznis Airways on June 14, 2012.
Southwest Airlines (Dallas) reported third quarter 2010 net income of $205 million, or $.27 per diluted share, compared to a net loss of $16 million, or $.02 loss per diluted share, for third quarter 2009. Both years’ results included special items related to non-cash, mark-to-market, and other items associated with a portion of the Company’s fuel hedge portfolio. Excluding special items for both periods, third quarter 2010 net income was a third quarter Company record of $195 million, or $.26 per diluted share, compared to $31 million, or $.04 per diluted share, for third quarter 2009. This exceeded Thomson’s First Call mean estimate of $.25 per diluted share for third quarter 2010.
Third quarter 2010 unit costs, excluding special items, increased 7.1 percent from third quarter 2009, largely due to the 11.7 percent increase in economic fuel costs to $2.38 per gallon. Third quarter 2010 economic fuel costs included $56 million, or $0.15 per gallon, in unfavorable cash settlements for fuel derivative contracts. As of October 15th, the Company had derivative contracts in place for approximately 40 percent of its estimated fourth quarter 2010 fuel consumption at varying crude-equivalent prices up to approximately $95 per barrel; approximately 10 percent if market prices settle in the $95 to $120 per barrel range; and approximately 30 percent if market prices exceed $120 per barrel. Based on this fuel hedge position and market prices (as of October 15th), the Company estimates economic fuel costs, including fuel taxes, for fourth quarter 2010 will be in the $2.45 to $2.50 per gallon range.
For 2011, the Company has derivative contracts in place for approximately 65 percent of its estimated fuel consumption at varying crude-equivalent prices up to approximately $90 per barrel; approximately 55 percent if market prices settle in the $90 to $95 per barrel range; approximately 30 percent if market prices settle in the $95 to $105 per barrel range; and approximately 55 percent if market prices exceed $105 per barrel. Beyond 2011, the Company has coverage of approximately 60 percent of its estimated fuel consumption in 2012; approximately 50 percent in 2013; and approximately 45 percent in 2014, all at varying price levels. The total market value (as of October 15th) of the Company’s net fuel derivative contracts for the remainder of 2010 through 2014 reflects a net liability of approximately $90 million.
Excluding fuel and special items in both periods, third quarter 2010 unit costs increased 5.1 percent from third quarter 2009, which was better than anticipated primarily due to lower than expected advertising and Employee benefit costs. Excluding profitsharing and special items in both periods, third quarter 2010 nonfuel unit costs increased 2.5 percent compared to third quarter last year. Based on current cost trends, the Company expects its fourth quarter 2010 nonfuel unit costs to increase from fourth quarter last year.
On September 27th, Southwest Airlines announced it had entered into a definitive agreement to acquire all of the outstanding common stock of AirTran Holdings, Inc., the parent company of AirTran Airways (AirTran), for a combination of cash and Southwest Airlines’ common stock. The acquisition will significantly expand Southwest Airlines’ low-fare service to many more customers in many more domestic markets, creating hundreds of additional low-fare itineraries for the traveling public, more than what Southwest or AirTran could otherwise provide on a stand-alone basis, particularly in and out of Atlanta, Georgia. Moreover, the expansion of low fares should generate hundreds of millions in annual savings to consumers.
Based on an economic analysis by Campbell-Hill Aviation Group, LLP, Southwest Airlines’ more expansive low-fare service at Atlanta, alone, has the potential to stimulate over two million new passengers and over $200 million in consumer savings, annually. These savings would be created from the new low-fare competition that Southwest Airlines would be able to provide as a result of the acquisition, expanding the well-known “Southwest Effect’” of reducing fares and stimulating new passenger traffic wherever it flies.
The closing of the proposed acquisition is subject to the approval of AirTran stockholders, receipt of Department of Justice (DOJ) and certain other regulatory clearances, and fulfillment of customary closing conditions. The Company has met its required filing deadline with the DOJ in compliance with the terms of its agreement with AirTran and has begun the integration planning process.
The proposed transaction is expected to yield net annual synergies of more than $400 million by 2013. Excluding one-time acquisition and integration costs estimated to be between $300 million and $500 million, the transaction is also expected to be accretive to Southwest’s fully-diluted earnings per share in the first year following the close of the transaction, and strongly accretive, thereafter, upon full realization of the estimated net synergies. The Company currently expects to close the transaction in the first half of 2011.
Copyright Photo: Tony Storck. Please click on the photo for additional details.