Tag Archives: Boeing

Video: Boeing’s new 737 Space Bins

Boeing has issued this new video:

Boeing’s new Space Bins answers the call for more space to stow carry-on bags. Each of the larger Space Bins will hold six standard sized bags, two more than the large current Boeing Sky Interior pivot bins installed on many Next-Generation 737s. Airlines can expect quicker boarding and turnaround processes at the gate and passengers will benefit from decreased concern about finding a spot for their carry-on bag when boarding a flight.

Sun Country’s pilots picket at Minneapolis/St. Paul International Airport

Sun Country Airlines (Minneapolis/St. Paul) could be facing a strike by its pilots represented by the Air Line Pilots Association (ALPA). The pilots of the airline yesterday (April 24) picketed for higher wages outside of the Minneapolis-St. Paul International Airport. ALPA states they are the lowest Boeing 737 scheduled airline pilots in the country. The pilots have authorized a strike if necessary.

The union issued this statement:

ALPA logo-1

Sun Country Airlines Pilots, represented by the Air Line Pilots Association Int’l (ALPA), conducted informational picketing Friday at Minneapolis-St. Paul International Airport, saying the company’s current pay proposal would keep SCA pilot wages near the bottom of the industry for another five years.

Already the nation’s lowest-paid scheduled service airline pilots for their aircraft type, management’s recent proposal would provide only minimal increases. Sun Country pilots last received a pay rate increase in 2005.

“Our current pay is 30 percent below the midpoint for our peers. We’re seeking a contract that gradually gets us closer to the industry average. The company offer keeps us from realizing that goal throughout the life of a new contract,” said Capt. Brian Roseen, chairman of Sun Country’s ALPA Master Executive Council.

Virtually all of Sun Country’s 247 active ALPA pilots not flying or in training marched in shifts outside MSP’s Terminal 2, joined by supporters from United, Delta, FedEx Express, Compass, Endeavor Air, and other ALPA pilot groups.

ALPA and Sun Country have been in negotiations for five years, and in federal mediation since 2012. In February pilots voted 100 percent to authorize ALPA to declare a legal strike if later allowed to do so by the federal government. Before any strike could occur, the National Mediation Board would have to release the pilot group from mediation and the group would have to complete a 30-day cooling off period.

“Under our new ownership Sun Country has been profitable and more than doubled in size. It’s time for them to invest in people the same way they’ve invested in airplanes and facilities,” Roseen said. “We want to negotiate. We’re 100 percent ready to do everything the law allows to lift ourselves up from the bottom of the industry.”

Meanwhile the pilots of Southwest Airlines (Dallas) came to the aid of its fellow pilots at Sun Country. SWAPA issued this statement:

SWAPA logo

As the pilots of Sun Country (SCA) picket on Friday outside of Minneapolis-St. Paul International Airport, the Southwest Airlines Pilots’ Association (SWAPA) announces support of the SCA pilots’ efforts to obtain an improved contract. Sun Country Airlines pilots are the lowest-paid Part 121 B-737 pilots in the country and have been in contract negotiations for more than five years. In February, the SCA pilots voted nearly unanimously to authorize ALPA to call a legal strike if necessary, upon a release from mediation by the National Mediation Board and the expiration of a cooling-off period.

“Sun Country pilots have the lowest 737 pay rates for scheduled carriers and are about 30 percent below the industry average pay for this equipment,” said SWAPA President Capt. Paul Jackson. “Low fares do not have to equal low wages in our industry and we fully support our friends at Sun Country in seeking a fair agreement.”

Sun Country management has failed to offer industry-standard fair compensation to pilots despite doubling the number of aircraft and profitability in recent years under new ownership. The company’s most recent contract offer would still leave the SCA pilots at the bottom of 737 pilot pay rates for another five years. The SCA pilots’ union leadership is proposing gradual increases toward the industry average, with the goal of reaching middle ground by the end of the contract term.

Top Copyright Photo: Ken Petersen/AirlinersGallery.com. Boeing 737-8Q8 N804SY (msn 30689) prepares to touch down at Las Vegas McCarran International Airport.

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La Compagnie today starts London – New York area flights

La Compagnie (Paris-CDG) today enters the very competitive London – New York area market. The French boutique upscale carrier commences Boeing 757-200 services today between Luton Airport and Newark Liberty International Airport with Boeing 757-256 F-HTAG (msn 29307).

La Compagnie logo-2 (LRW)

Copyright Photo: Keith Burton/AirlinersGallery.com (all others by La Compagnie). Former Thomson Airways Boeing 757-204 F-HCIE (msn 27208, ex G-BYAT) remains at Southend as it is prepared for service.

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American Airlines Group reports a record first quarter GAAP net profit of $932 million

American Airlines Group Inc. (American Airlines) (Dallas/Fort Worth) today reported its first quarter 2015 results.

Reported record first quarter 2015 net profit of $1.2 billion excluding net special charges, tripling the Company’s first quarter 2014 net profit of $402 million excluding net special credits

Reported record first quarter 2015 GAAP net profit of $932 million, a $452 million improvement versus the Company’s first quarter 2014 GAAP net profit of $480 million

Achieved several critical integration milestones during the quarter, including a combined frequent flyer program and recalibration of the schedule at the Company’s hubs at Chicago O’Hare and Dallas/Fort Worth. Also obtained a single operating certificate from the Federal Aviation Administration (FAA) in early April

Declared a dividend of $0.10 per share to be paid on May 18, 2015, to shareholders of record as of May 4, 2015

Excluding net special charges, American Airlines Group’s first quarter 2015 net profit was a record $1.2 billion, or $1.73 per diluted share. This represents a tripling of the Company’s first quarter 2014 net profit excluding net special credits of $402 million, or $0.54 per diluted share. The Company’s first quarter 2015 pretax margin excluding net special charges was a record 12.7 percent, up 8.6 percentage points from the same period last year.

On a GAAP basis, the Company reported a record net profit of $932 million, or $1.30 per diluted share. This compares to a GAAP net profit of $480 million in the first quarter 2014, or $0.65 per diluted share.

“We are pleased to report record first quarter profits, exceeding the prior record set just last year,” said Doug Parker, American Airlines Group Chairman and CEO. “The credit belongs to our 100,000 team members who are working together to restore American to the greatest airline in the world. We are particularly pleased with the integration achievements our team has realized and look forward to building on those successes through 2015 and beyond.”

Revenue and Cost Comparisons

While core demand remains healthy, first quarter 2015 revenue was impacted by competitive capacity growth, a stronger U.S. dollar and economic softness in Latin America. Total revenue in the first quarter was $9.8 billion, a decrease of 1.7 percent versus the first quarter 2014 on a 0.9 percent decrease in total available seat miles (ASMs). Consolidated passenger revenue per ASM (PRASM) was 13.44 cents, down 1.7 percent versus the first quarter 2014. Consolidated passenger yield was 16.82 cents, down 1.2 percent year-over-year.

Total operating expenses in the first quarter were $8.6 billion, a decrease of 7.1 percent compared to the first quarter 2014 due primarily to a 42.2 percent decrease in consolidated fuel expense. First quarter mainline cost per available seat mile (CASM) was 12.80 cents, down 5.2 percent on a 1.7 percent decrease in mainline ASMs versus the first quarter 2014. Excluding special charges and fuel, mainline CASM was 9.49 cents, up 5.8 percent compared to the first quarter 2014. Regional CASM excluding special charges and fuel was 16.47 cents, down 0.9 percent on a 5.7 percent increase in regional ASMs versus the first quarter 2014.

Liquidity

As of March 31, 2015, the Company had approximately $9.9 billion in total cash and short-term investments, of which $757 million was restricted. The Company also had an undrawn revolving credit facility of $1.8 billion.

Also in the first quarter, the Company returned $260 million to its shareholders through the payment of $70 million in quarterly dividends and the repurchase of $190 million of common stock, or 3.8 million shares, at an average price of $49.47 per share.

Shares repurchased under the buyback program may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades or accelerated share repurchase transactions. Any such repurchases will be made from time to time subject to market and economic conditions, applicable legal requirements and other relevant factors. The program does not obligate the Company to repurchase any specific number of shares or continue a dividend for any fixed period, and may be suspended at any time at the Company’s discretion.

The Company also purchased approximately 87,230 shares from its Disputed Claims Reserve at the prevailing market price to satisfy certain tax obligations resulting from the February 10, 2015 distribution.

Approximately $644 million of the Company’s unrestricted cash and short-term investment balance was held in Venezuelan bolivars. This balance includes approximately $621 million valued at 6.3 bolivars to the U.S. dollar and approximately $23 million valued at 12.0 bolivars to the U.S. dollar, with the rate depending on the date the Company submitted its repatriation request to the Venezuelan government. These rates are materially more favorable than the exchange rates currently prevailing for other transactions conducted outside of the Venezuelan government’s currency exchange system. The Company’s cash balance held in Venezuelan bolivars decreased $12 million from the December 31, 2014 balance of $656 million due to payments made in bolivars for local operating expenditures.

During 2014, the Company significantly reduced capacity in the Venezuelan market and is no longer accepting bolivars as payment for airline tickets. The Company is monitoring this situation closely and continues to evaluate its holdings of Venezuelan bolivars for additional foreign currency losses or other accounting adjustments, which could be material, particularly in light of the additional uncertainty posed by the February 2015 changes to the foreign exchange regulations and the continued deterioration of economic conditions in Venezuela. More generally, fluctuations in foreign currencies, including devaluations, cannot be predicted by the Company and can significantly affect the value of its assets located outside the United States. These conditions, as well as any further delays, devaluations or imposition of more stringent repatriation restrictions, may materially adversely affect the Company’s business, results of operations and financial condition.

Notable Accomplishments

Merger Accomplishments

Merged frequent flyer programs by moving US Airways Dividend Miles members into AAdvantage®
In April, received a single operating certificate from the FAA which allows the airline to operate under one certificate
Achieved a ratified 5-year contract with the carrier’s 15,000 pilots that provides industry leading pay rates
Optimized the Company’s flight schedule at Chicago O’Hare International Airport and Dallas/Fort Worth International Airport
Co-located operations at eight more airports across its network, bringing the total number of co-locations to 114

Finance Accomplishments

Completed a $500 million unsecured bond offering priced at 4.625% and a $1.2 billion enhanced equipment trust certificate (EETC) issue priced at a blended rate of 3.425%. In addition, in April the Company refinanced its $750 million 2014 slot, gate and route term loan at lower interest rates and improved collateral terms
On March 20, the Company was added to the S&P 500 index
Marketing, Network and Fleet Accomplishments

Took delivery of the first two Boeing 787 Dreamliners, which will enter domestic service in May 2015, and begin flying internationally in June 2015. Also, as part of its ongoing fleet renewal program, the Company took delivery of 18 new mainline aircraft, and retired its last Boeing 767-200

Signed a codeshare agreement with Korean Air to place its code on American flights between Dallas/Fort Worth International Airport and Seoul, South Korea

Became the official airline partner of the Los Angeles Clippers and was named the official airline of the Chicago Cubs and Wrigley Field

In the first quarter, the Company recognized $311 million in net special charges, including:

$223 million in merger related integration expenses, including $216 million in mainline special charges and $7 million in regional special charges

$99 million in charges relating to the Company’s new pilot joint collective bargaining agreement

$6 million in net credits for bankruptcy related items, principally consisting of fair value adjustments for bankruptcy settlement obligations

$8 million non-operating net special credits comprised of a $17 million early debt extinguishment gain on the repayment of American’s AAdvantage® loan with Citibank, offset in part by a $9 million charge related to the prepayment of certain aircraft financings

$9 million in tax special charges related to certain indefinite-lived intangible assets

Copyright Photo: AirlinersGallery.com. The new Boeing 787-8 goes into revenue service next month. The pictured Boeing 787-8 Dreamliner N801AC (msn 40619) was the second, delivered on February 27. N801AC is pictured landing at London (Heathrow) on a proving and training flight.

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Emirates SkyCargo is coming to Orlando

Emirates SkyCargo (Dubai), the freight division of Emirates (Dubai), is set to expand its United States cargo network to 11 destinations, when the airline launches a daily service to Orlando, Florida from September 1, 2015.

The Dubai – Orlando route will be served by a Boeing 777-200 LR aircraft, which has a belly-hold capacity of up to 17 tons of cargo per flight. Emirates SkyCargo also has belly-hold cargo services to San Francisco, Seattle/Tacoma, Washington D.C., Boston, Dallas/Fort Worth, New York (JFK), Los Angeles, Chicago (O’Hare) and Houston (Bush Intercontinental), with the latter four cities also forming part of the air cargo carrier’s United States freighter network, along with Atlanta.

Emirates flight EK 219 will depart Dubai International Airport at 0350hrs local time and arrive at Orlando International Airport Terminal at 1140hrs local time. The return flight, EK 220 will depart Orlando International at 1420hrs and arrive into Dubai at 1230hrs the following day.

Copyright Photo: Ton Jochems/AirlinersGallery.com. Emirates SkyCargo (Emirates) Boeing 777-F1H A6-EFI (msn 35609) taxies at Amsterdam.

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United Airlines reports record first quarter net income of $508 million, announces its fleet plans including 10 Boeing 777-300 ERs

United Airlines (UAL) (United Continental Holdings, Inc.) (Chicago) today reported first-quarter 2015 net income of $582 million, or $1.52 per diluted share, excluding $74 million of special items. Including special items, UAL reported first-quarter net income of $508 million, or $1.32 per diluted share. These results are a record first-quarter profit for the company.

UAL earned a 17.1 percent return on invested capital for the 12 months ended March 31, 2015.
UAL’s consolidated passenger revenue per available seat mile (PRASM) increased 0.4 percent for first-quarter 2015 compared to first-quarter 2014.

First-quarter 2015 consolidated unit costs (CASM), excluding special charges, third-party business expenses, fuel and profit sharing, decreased 1.5 percent year-over-year on a consolidated capacity increase of 0.1 percent. First-quarter 2015 CASM, including those items, decreased 13.1 percent year-over-year.

In the quarter, UAL returned approximately $200 million to shareholders as part of its previously announced $1 billion share buyback program.

In the quarter, UAL prepaid approximately $120 million of debt and announced its intention, in the second quarter, to prepay $601 million of its 6 percent notes due 2026 and 2028.

“This quarter we reported a profit of nearly $600 million, excluding special items, a $1 billion improvement compared to the first quarter of 2014, and I’d like to thank the United team for all their great work,” said Jeff Smisek, UAL’s chairman, president and chief executive officer. “We continued to improve our operational reliability and deliver products that enhance our customers’ experience, including new aircraft, improved food, new inflight entertainment options and modern facilities. We are making significant progress on our long-term plan to reduce costs, improve our margins and grow our earnings, and expect our second quarter pre-tax margin to be between 12 and 14 percent, excluding special items.”

First-Quarter Revenue and Capacity

For the first quarter of 2015, total revenue was $8.6 billion, a decrease of 1.0 percent year-over-year. First-quarter consolidated passenger revenue increased 0.5 percent to $7.4 billion, compared to the same period in 2014. Ancillary revenue per passenger in the first quarter increased 8.6 percent year-over-year to more than $23 per passenger. First-quarter cargo revenue grew 15.8 percent year-over-year to $242 million. Other revenue in the first quarter decreased 14.2 percent year-over-year, mostly due to the reduction in sales of fuel to a third party. The corresponding expense decline from this reduction appears in third-party business expense.

Consolidated revenue passenger miles increased 0.1 percent and consolidated available seat miles increased 0.1 percent year-over-year for the first quarter, resulting in a first-quarter consolidated load factor of 81.1 percent.

First-quarter 2015 consolidated PRASM increased 0.4 percent and consolidated yield increased 0.4 percent compared to the first quarter of 2014.

“This quarter our PRASM performance reflected good progress on our revenue initiatives,” said Jim Compton, UAL’s vice chairman and chief revenue officer. “We will continue to match capacity with demand while making the appropriate network, fleet and product decisions to enhance revenue and margin performance, while improving our customers’ experience.”

First-Quarter Costs

First-quarter consolidated CASM, excluding special charges, third-party business expense, fuel and profit sharing, decreased 1.5 percent compared to the first quarter of 2014. The improved cost performance was driven by the better-than-expected performance from the company’s Project Quality efficiency program and strong U.S. dollar. First-quarter consolidated CASM including those items decreased 13.1 percent.

First-quarter total operating expenses, excluding special charges, decreased $1.19 billion, or 13.2 percent, year-over-year. Including special charges, total operating expenses decreased $1.18 billion, or 13.0 percent, in the first quarter versus the same period in 2014.

First-Quarter Liquidity and Cash Flow

In the first quarter, UAL generated over $1 billion in free cash flow, and ended the quarter with $7.0 billion in unrestricted liquidity, including $1.35 billion of undrawn commitments under its revolving credit facility. During the first quarter, the company had gross capital expenditures of $794 million, excluding fully reimbursable projects. The company contributed approximately $180 million to its pension plans and made debt and capital lease principal payments of $320 million in the first quarter, including approximately $120 million of prepayments. UAL also announced its intention to prepay the remaining $303 million of 6 percent notes due 2026 on April 1, 2015 and to prepay $298 million of 6 percent notes due 2028 on May 1, 2015.

As part of UAL’s $1 billion share buyback program, the company spent approximately $200 million in share repurchases in the first quarter. Through the first quarter, UAL has returned a total of approximately $520 million to shareholders under the program.

For the 12 months ended March 31, 2015, the company’s return on invested capital was 17.1 percent.

For more information on UAL’s second-quarter 2015 guidance, please visit ir.united.com for the company’s investor update.

Fleet Updates

Today, UAL announced refinements to its fleet plan, which will allow the company to achieve longer-term network needs without increasing its outlook for capacity or gross capital expenditures over the next several years. These adjustments will accelerate the company’s network initiatives as it transitions flying into the mainline operation from the regional operation, increases average gauge and reduces reliance on 50-seat aircraft. As part of this effort, the company will:

Complete the removal of more than 130 50-seat aircraft from its schedule by the end of 2015. UAL will remove additional 50-seat aircraft in 2016 and beyond as aircraft come off lease.

Above Copyright Photo: Brian McDonough/AirlinersGallery.com. United is removing rapidly its smaller regional jets. Operated by ExpressJet Airlines, Embraer ERJ 145XR (EMB-145XR) N12166 (msn 145831) approaches the runway at Baltimore/Washington (BWI).

Exchange 10 787 orders with Boeing for 10 777-300 ERs for delivery beginning in 2016. The new 777-300 ER aircraft will provide attractive upgauge and range opportunities to the company at competitive economics.

Extend the life of 11 additional 767-300 ER aircraft. The company now plans to extend the life of all 21 767-300 ER through investments in winglets, reliability improvements and interior modifications, which will improve financial performance and make the aircraft more customer pleasing.

Above Copyright Photo: SPA/AirlinersGallery.com. United has made the decision to extend the operating life of all 21 Boeing 767-300 ER aircraft. United is also inserting some international Boeing 777-200 and 757-200 aircraft back into the domestic market.

Reconfigure and transition 10 777-200 aircraft currently used in international markets into the domestic network, and position a number of its trans-Atlantic 757-200 fleet into the domestic and Latin markets, with the extension of the 767-300 ER aircraft.

Acquire additional used narrowbody aircraft. The company is in final negotiations regarding the lease of 10 to 20 used narrowbody aircraft for delivery over the next few years. In addition, the company plans to continue to seek other opportunities to acquire used aircraft to meet its needs as market conditions allow.

These changes will not impact the company’s current 2015 capacity guidance, and are consistent with the company’s focus on capacity discipline, and will not alter the company’s current gross annual capital expenditure guidance of $2.7 billion to $2.9 billion over the next three to four years.

“These changes are part of our strategy to improve operational reliability, grow capacity with demand, and enable us to achieve our long-term goal to improve margins and return on invested capital,” said John Rainey, UAL’s executive vice president and chief financial officer. “Customers tell us they prefer larger aircraft, and these fleet modifications will provide more opportunity for our customers to travel on the type of aircraft they prefer.”

Top Copyright Photo: SPA/AirlinersGallery.com. United will exchange 10 Boeing 787 orders with Boeing for 10 777-300 ERs for delivery beginning in 2016. According to the carrier, “the new 777-300 ER aircraft will provide attractive upgauge and range opportunities to the company at competitive economics.” Boeing 787-8 Dreamliner N26910 (msn 34826) climbs away from London (Heathrow).

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Southwest Airlines reports a record first quarter profit

Southwest Airlines Company (Dallas) today reported its first quarter 2015 results:

Southwest 2014 logo-1

Record first quarter net income, excluding special items1, of $451 million, or $.66 per diluted share, compared with first quarter 2014 net income, excluding special items, of $126 million, or $.18 per diluted share. This represented a 266.7 percent increase from first quarter 2014 and exceeded the First Call consensus estimate of $.65 per diluted share.

Record first quarter net income of $453 million, or $.66 per diluted share, which included $2 million (net) of favorable special items, compared with first quarter 2014 net income of $152 million, or $.22 per diluted share, which included $26 million (net) of favorable special items.

Record first quarter operating income of $780 million. Excluding special items, record first quarter operating income of $770 million, resulting in an operating margin2 of 17.4 percent.

Strong free cash flow1 of $859 million used to return $381 million to Shareholders through dividends and share repurchases, and to repay $51 million in debt and capital lease obligations.

Return on invested capital, before taxes and excluding special items (ROIC)1, for the 12 months ended March 31, 2015, of 25.6 percent, compared with 14.2 percent for the 12 months ended March 31, 2014.

Gary C. Kelly, Chairman of the Board, President, and Chief Executive Officer, stated, “We are thrilled to report an exceptionally strong first quarter 2015 earnings performance. Our net income, excluding special items, of $451 million, or $.66 per diluted share, far surpasses any first quarter profit in our history and represents our eighth consecutive quarter of record profits. Our first quarter 2015 operating income, excluding special items, increased over 200 percent year-over-year to $770 million, resulting in a first quarter record 17.4 percent operating margin. Our ROIC for the 12 months ended March 31, 2015, was an outstanding 25.6 percent. These superb results earned our 47,000 hard-working and dedicated Employees a first quarter record $126 million profitsharing accrual, up 334.5 percent from first quarter 2014.

“Total operating revenues were a first quarter record $4.4 billion, driven by a 6.2 percent year-over-year increase in passenger revenues and double-digit year-over-year percentage growth in freight revenues. Customer demand was strong throughout first quarter 2015, resulting in a record first quarter load factor of 80.1 percent. As expected, first quarter 2015 passenger revenues grew in line with our available seat mile (ASM) growth of 6.0 percent, year-over-year. Considering the 4.1 percent increase in stage length and the 2.7 percent increase in seats per trip3 (gauge) from our fleet modernization, year-over-year, we are very pleased with our first quarter 2015 unit revenue performance. Strong revenue and booking trends have continued thus far in April. Second quarter 2015 year-over-year comparisons are more challenging, largely due to last year’s exceptional and above-trend performance. With the continuation of year-over-year increases in stage length and gauge, we currently expect our April 2015 passenger unit revenues to decline, year-over-year, approximately two percent.

“We are delighted also with our unit cost trends, which continue to benefit from increased stage length, increased gauge, lower maintenance costs, and substantially lower fuel prices. Our first quarter 2015 unit costs, excluding special items, declined 12.4 percent year-over-year. First quarter 2015 economic fuel costs were $2.00 per gallon, compared with $3.08 per gallon in first quarter 2014, resulting in over $450 million in economic fuel cost savings. Based on our existing fuel derivative contracts and market prices as of April 16, 2015, we estimate second quarter 2015 economic fuel costs per gallon will be comparable to first quarter 2015’s $2.00 per gallon.

“Setting fuel aside, the solid first quarter 2015 cost performance reflects our intense focus to control costs and maintain our competitive low-cost position. Excluding fuel and oil expense and special items, our first quarter 2015 unit costs were comparable to first quarter last year. Unit costs were down 3.6 percent, year-over-year, when also excluding first quarter 2015 profitsharing expense. Based on current cost trends, and excluding fuel and oil expense, special items, and profitsharing, we expect second quarter 2015 unit costs to decline in the one-to-two percent range, and full year 2015 unit costs to decline approximately two percent, both compared with the same year-ago periods.

“Our network optimization is producing strong financial results, and we are pleased with the performance of our markets under development. We continue to project roughly 700 aircraft by year-end, and an approximate seven percent year-over-year increase in ASMs versus 2014. The full year effect of 2015’s expansion is also estimated to increase 2016 ASMs approximately five percent, year-over-year, and we currently expect any further 2016 ASM year-over-year growth to be modest, with a focus on producing strong returns on our investments. Our incremental fleet growth in 2016 is currently expected to approximate two percent, compared with 2015.

“The Customer response to our new Dallas Love Field service, which represents the majority of 2015 year-over-year ASM growth, is very strong, and first quarter 2015 Dallas traffic has increased 145.5 percent from year-ago levels. In first quarter 2015, we acquired the rights to two additional gates, bringing our total gate occupancy to 18 at Dallas Love Field. By August 2015, we are scheduled to operate 180 weekday departures to 50 nonstop destinations, representing a more than 50 percent increase in flight activity since the lifting of the Wright Amendment restrictions4 in October 2014. We are very pleased to provide more competition, more travel options, and low fares for the Dallas market.

“Our international expansion also continued during first quarter 2015. On March 7, 2015, Costa Rica became our sixth international country served with daily nonstop service between Baltimore/Washington and San Jose, Costa Rica. We also launched international flying from Houston Hobby with seasonal Saturday service to Aruba5. We remain on track to add an additional six international destinations from Hobby later this year with the planned October completion of the international terminal. We look forward to beginning service to Puerto Vallarta, Mexico, in June 2015, and pending government approvals, Belize City, Belize, in October 2015.

“We are managing our invested capital aggressively and continue to provide healthy returns to our Shareholders. During first quarter 2015, we returned $381 million through the payment of $81 million in dividends and the repurchase of $300 million in common stock. And, we expect to complete the repurchase of the remaining $80 million under our existing $1 billion share repurchase authorization next month. Our balance sheet, liquidity, and cash flows remain strong, and we ended first quarter 2015 with $3.4 billion in cash and short-term investments, with a fully available unsecured revolving credit line of $1 billion.”

During first quarter 2015, the Company returned $381 million to its Shareholders through the payment of $81 million in dividends and the repurchase of $300 million in common stock, or 5.1 million shares, pursuant to an accelerated share repurchase (ASR) program executed during the quarter. This ASR program was completed in early April, and the Company then received an additional 1.8 million shares, bringing the total shares repurchased under the first quarter 2015 ASR program to 6.9 million. During first quarter 2015, the Company also received the remaining 1.1 million shares pursuant to the fourth quarter 2014 $200 million ASR program, bringing the total shares repurchased under that ASR program to 4.9 million. The Company intends to complete the repurchase of the remaining $80 million under its existing $1.0 billion share repurchase authorization in May 2015.

Boeing 737 Delivery Schedule:

Southwest 4.2015 737 Delivery Schedule

SWAPA logo

In other related news, the Southwest Airlines Pilots’ Association (SWAPA) announced it has joined the Partnership for Open and Fair Skies, a coalition of U.S. airlines and airline industry labor unions. These groups seek to level the playing field against heavily subsidized state-owned carriers from Qatar and the United Arab Emirates (UAE).

“These government-owned Gulf carriers are not playing by the rules their governments agreed to when they signed Open Skies agreements with the U.S.,” said SWAPA President Capt. Paul Jackson. “Qatar Airways, Etihad Airways, and Emirates Airline are being fueled by tens of billions of dollars in state subsidies and that not only puts U.S. airlines at a competitive disadvantage, but also jeopardizes jobs throughout the U.S. airline industry.”

In joining the Partnership for Open and Fair Skies, SWAPA has united with American Airlines, Delta Air Lines, United Airlines, and seven other labor organizations in asking the U.S. government to open consultations with Qatar and the UAE, as provided for within the Open Skies agreements. This step is needed to address the unfair state subsidies that are enabling Qatar, Etihad, and Emirates to rapidly expand their fleets and routes into the U.S. market. SWAPA also backed the Partnership’s call for the U.S. government to seek a freeze on any new passenger service by the Gulf carriers into the U.S. as the consultations go forward.

A 55-page white paper presented by the Partnership to the U.S. government earlier this year and released to the public in March documented $42 billion in state subsidies and other unfair benefits provided to Qatar, Etihad, and Emirates by their respective governments since 2004 alone. That massive state support is a clear violation of Open Skies policy.

“The evidence is too overwhelming and the airline industry is too important to our country for the U.S. government not to take action,” continued Jackson. “Southwest pilots are proud to stand with the other members of the Partnership in calling for a level playing field.”

Copyright Photo: Joe G. Walker/AirlinersGallery.com. Southwest continues to buy previously operated Boeing 737-700s on the open market. Formerly operated by WestJet as C-FWAD, the pictured Boeing 737-7CT is now operating as N566WN (msn 32753) for Southwest in full colors. N566WN arrives at Seattle-Tacoma International Airport.

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