Southwest Airlines (LUV) Q4 2022 Earnings Call Transcript, Why Southwest Airlines Stock Is Falling Today, Why Southwest Airlines Stock Fell in December, Why Southwest Airlines Is Losing Altitude Today. We have our ongoing operations modernization plan. The next question is from Conor Cunningham from Melius Research. And then, just broadly, with your strategy, are you ruling out ever having a differentiated product in the cabin, either like a larger seat or extra legroom or something like that just to drum up revenue in the future? I think it's really what you would expect in terms of where customers want to go this summer. Our people are joy to deal with rather than the opposite. Travel demand remained strong thus far, but we remain mindful of the uncertain economic environment. We were No. The Motley Fool recommends Southwest Airlines. We're seeing that moves up very, very quickly. And we'll take our last question from David Slotnick from TPG. Well, I'll start off, and then Tammy and Bob can chime in. Southwest Airlines Competitors So, they will shut those down for periods of time. Thanks for the question. Thank you, Tammy. Average Southwest Airlines Profit-sharing is an expense we want to be as big as possible so our people get a greater reward, Kelleher said, according to Forbes. But we need to run a reliable operation for our customers. Making the world smarter, happier, and richer. So we will modify those schedules to make sure we reflect the lower aircraft count. Fort Worth-based American Airlines, which lost $2 billion for the year, did not accumulate any profit-sharing for employees for 2021. So, as we refill that order book, then we can look to how that -- what that means for '24, '25. The COVID expansions and the 18 new cities in Hawaii, the second bucket being restoring what we flew before. The MAX aircraft is a great aircraft. Our new MAX 8 deliveries are coming into service with in-seat power and larger overhead bins. Hey. And that's where then they say, "Well, I'll fly them again." So Boeing was early in working with its suppliers, multiple tiers down to shore up supply chain issues. As part of an annual tradition, Southwest is sharing that profit with employees. The airline announced Thursday its giving 60,000 employees a $667 million profit-sharing bonus. That means some eligible employees will soon receive 12.2% of their annual salary, which is the equivalent of roughly an additional six weeks of pay. Beginning with fuels. Andrew Watterson -- Chief Operating Officer. Managed business revenues also improved significantly throughout the quarter and by March were nearly restored to March 2019 levels, just shy of 100%. I think the -- I think that's a really good way to summarize how we're thinking about it as well, just in terms of sequential -- think about the sequential trend there. And you've seen us -- you have seen us add things now like power and then the larger bins and enhancing the Wi-Fi, and that comes from our customers telling us that's what they want. We had no material impact on our operations the following day. *Average returns of all recommendations since inception. But in terms of the capacity plan, at the investor day in December, it seemed like it was not dependent on aircraft deliveries and that the initial guide provided then was firm despite any delivery delays. The aviation and safety has gotten so good that you don't really see repeat occurrences. I think this move from 90 down to 70 will help us get a real clean view on our capacity set. He is a University of Washington graduate. WebFurther, Southwest remunerates its employees better than others in the industry and takes pride in the low employee turnover it records. A lot of -- a lot of carriers are dealing with this, and that was going to true up roughly at the end of the year. So, a lot of other positives that will come on here as you move forward across the year. So like Bob said, we have work to do. We have a lot of opportunities, but we want that growth to be orderly and measured and as consistent as we can be year to year to year. Employee Net Promoter score tracks employees' overall score to this question - On a scale from 0-10, how likely are you to recommend working at Southwest Airlines to a friend?. Schloss Hollenburg liegt idyllisch zwischen Weinbergen und der Donau mitten im pittoresken Dorf Hollenburg bei Krems: 72 km westlich von Wien (50 Min. I'll take a minute to expand on the commentary in our press release this morning and provide more color on our first quarter results and second quarter outlook. I'm not saying it will be Phoenix and Denver, but I'll use those examples. They were flight instructors, pilots and aircraft. We just reached a tentative agreement with TWU 550, which represents our Meteorologists, and I want to commend both negotiating committees for the spirit of cooperation that led to that agreement. But no, there's no evidence at this point that the book away is continuing. I realize a lot of this is out of your control, but I think you mentioned that you're still on track for network restoration. As a reminder, we are investing in three onboard initiatives, enhanced Wi-Fi, in-seat power and larger overhead bins. Thankfully, market prices have fallen over recent weeks, in particular, crack spreads, which is a welcome relief. We've got a lot of opportunities. And there's some trends across the industry where others are making it harder to do business in the managed travel space. And then, sorry to elaborate on one question that was asked earlier as well. Please go ahead. And the third element is we fly two different aircraft sizes, the 700 sizes and 800, and we've been taking 800s because of 700s have not been delivered yet. But yes, we feel like the revenue impact from the ops disruption, most of it was holiday return travel that obviously was canceled because the outbounds weren't there. The five, six or I think it's the number I've got in my head. We may have an oversell that we have to deal with. They want to -- it's not as strong as '22 when you really saw this "revenge travel" come back especially on the leisure side. So -- and it's been managing things for a while. And ladies and gentlemen, we will now begin with our media portion of today's call. We actually publish those schedules with some easily movable aircraft to hedge our bets in case something did happen, so that will be fairly clean. Benefits | Southwest Careers Southwest Airlines ranked world's No. 1 company for HR The total market value of our fuel hedge portfolio for second quarter 2023 through 2025 is $418 million. Yes, sure. And then, second, we want -- again, as Andrew said, we want orderly growth. Our operations team navigated through a stream of difficult weather conditions successfully with no material impact to our network performance. *Stock Advisor returns as of April 24, 2023, Bob Jordan -- Executive Vice President, Corporate Services. We're not taking 152 aircraft next year. But back to your question, I mean, the value proposition that has always existed for Southwest Airlines for over 50 years is still true today. As a reminder, we have a surplus of underutilized aircraft and our fleet due to pilot hiring constraints. We received a total of 30 aircraft deliveries during first quarter as expected, ending the quarter with 793 aircraft, which is a net of seven -700 retirements, two more than previously planned as we shifted up a couple of retirements from the second half of this year. And so, that says you will have safety procedures, policies and regulations that you adhere to. ET. Selected Company: Southwest Airlines Complete the following So, a quick reminder to please keep your questions to one and a follow-up, if needed. We've added travel credits that never expire just like our growth points that never expires. So just the other -- the flip side of fares is the -- you raise fares to manage your cost and there are real cost increases there. Thank you, operator, and welcome, everyone, to our first quarter 2023 conference call. And of course, those fares further out in the booking curve are lower nominally than taking a lot of volume close in where the fares are higher normally -- nominally. It adds additional flexibility in terms of transferability, flexibility during the day of travel. We will take our last question from David Vernon from Bernstein. NO WORDS will ever describe how indebted I feel to be apart of this company. Secondly, I would say that Ryan talked about, they put in a new revenue management system. We continue to expect our second quarter capacity to be up 14% year over year. I'll start and Tammy can clean up here. Hier, mitten in Hollenburg, ca. Thank you, Andrew. And so, that's what's rolled out there into our guide. And so -- and that's -- while there is more close-in leisure strength today than there was pre-pandemic, and it's certainly less than what it was kind of last summer and last fall. First and foremost, this issue primarily stem from the corporate policy and conviction of the founders of Southwest Airlines that laying-off employees during or when the company is experiencing financial or market low will never be an option. And maybe as a follow-up to that, Bob and Andrew, we're talking about restoring the network and getting back to where we were. And right now, that is pilot hiring. All companies have and Boeing is not immune from that. We had the 18 new cities in the Hawaii expansion we did and we modified that at the margin. Following our event in late December, I am proud of the quick rebound we had in early January and the strong operational performance that our employees delivered in Q1. Thank you. And as a reminder, we had two competing storylines in first quarter that played out as we anticipated. Southwest is also cutting its schedule in the first half of the year to provide more buffer to operations due to staffing challenges. Those are enhancements that we're looking at and continue to look at service to our customers. And with that, I will turn it back over to Ryan Martinez. Yes. And so, we continue all the activities outlined in our SMS as our way of making sure that we are safe. Now, with the order book dropping, the deliveries issue dropping from 90 to 70, that's the point at which the pilot constraint turns into an aircraft constraint is -- will definitely be earlier. Average Southwest Airlines Co Salary | PayScale Latest Stock Market News Today: Facebook shares jump, 1Q So how much of the growth in '24 is dependent on Boeing? Yields -- I think, in general, this is a high yield environment and I think airfares are strong. So we're by far the most rewarding airline. We are 51% hedged for our second quarter and estimate our second quarter fuel price to be in the $2.45 to $2.55 per gallon range, which is roughly $0.69 lower than our first quarter fuel price. And Bob mentioned, overall, we're going to have to continue to focus on those longer term measures and just continue to execute to see continued upward momentum on the brand Net Promoter Score. We recently added to our 2024 fuel hedge portfolio and are now 51% hedged next year as well. 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As a reminder, second quarter 2022 operating revenues included approximately $300 million of additional breakage revenue, a higher-than-normal amount related to flight credits issued during the pandemic that were soon set to expire, as well as our later policy change to eliminate flight credit expiration dates. The airline had about 5,000 employees with COVID-19 in early January, Jordan said. But back to your original question on kind of are there new patterns in terms of destinations that are emerging from a vacation standpoint, Cancun is very strong. Employees as expenses vs. employees as assets; Compensation below market, above market, or competitive 50% of our aircraft now are 800s or MAXs, which has a 32-inch of pitch. Business but not as usual: Auf Schloss Hollenburg ist fr Ihr Business-Event (fast) alles mglich aber niemals gewhnlich, vom elegant-diskreten Seated Dinner ber Ihre eigenen Formate bis zum von uns ausgerichteten Teambuilding-Event, dem einzigartigenWeinduell. We've made some adjustments we've -- as a result of the last couple of weeks, we've changed our minimum connect times at Las Vegas while we were looking at changing our December our crew bid to make sure the crew connections are lower. And then, just more near-term question. I mean, obviously, we participate in that to a lesser degree than what some of our competitors do. And then, more importantly, what does this mean for capacity next year? So, we've talked about Florida before, you obviously are very aware of the issues that have been discussed for carriers at certain -- New York, but yes, we're experiencing issues in Vegas with the reduction in available runway capacity, and we're working with the FAA and the ATC to deal with that. Sure, Matt. Southwest Airlines Reviews Therefore, I'm not going to walk through it again today. My apologies. For the quarter, we finished No. For full year 2023, we now estimate CASM-X to decrease in the range of 2% to 4% year over year compared with our previous guidance of down 3.5% to 5.5%. This strategy has provided Southwest with a dedicated workforce committed to quality and customer service. That is tremendous progress, and it feels like we're very close to full corporate revenue recovery at Southwest. Southwest Airlines recognizes that treating its employees well creates happy customers, which results in financial success. It's the group that we probably continue to press to keep the hiring on, at least in the near term here until we flip to aircraft constrained. So, it is worthy of attention from the FAA and worthy of intention from us. But in terms of bookings, no evidence of any sort of hangover. Southwest is giving its employees 6 weeks of extra pay Thank you for the time. They dipped of course, during the disruption, but they've come back quickly and tells me that we don't have a hangover from the ops disruption. Appreciate those thoughts. It's a bad experience for our customer. Please go ahead, sir. Hawaii is strong. Hey, good afternoon, guys. I think if you look here, we've looked at this a lot of different ways and you think about what the guide and what revenue performance is looking like here as we go into the second quarter. And of course, we have really good everyday low fares. It will be helpful in terms of how we manage ourselves here. We're also very-focused on mobile and other enhancements on our technology road map to offer more self-service options for our customers to give them more flexibility and ease during their journey. What's down is the frequency of those travelers. But as Ryan covered very thoroughly in his remarks, we're seeing demand strength here in the second quarter and at this point, trends look strong. 2 in the first quarter and had completion factors that were up two points year over year, on-time performance that I think was up three points quarter over quarter. 2 out of 10 airlines and on-time performance, which reflects well on our people. Airlines Helane, it's Ryan. But those are few and far between. Ihr Event, sei es Hochzeit oder Business-Veranstaltung, verdient einen Ort, der ihn unvergesslich macht. We win time and time again. Our lower aircraft delivery expectations this year is driving lower capacity expectations in second half 2023. It would give us time to settle that out, bring that out. All in all, the overall domestic revenue environment remains strong, and our initiatives are performing in line with our expectations. No, I think you covered it, Bob. But they -- I mean, Boeing is a great partner. The trends are strong. We began building our 2025 portfolio and are about 10% hedged. So, we've incorporated that best we can. Despite the lower capacity growth, nearly all of the capacity growth is still going back into key Southwest markets and adding market depth. So, we do expect that to be the last quarter with that headwind. I think the other thing just -- the other thing I think I would add is just we are seeing, as Ryan pointed out in his remarks, we're seeing strong business demand here. Is that based on the current environment and outlook that you feel the need to scale back, or is there something else? It has been bigger than it was really forecasted when the construction plan was created, which did sort of catch the industry I guess off guard in the sense it was -- you're so close to end, it's hard to adjust. Hey Duane. Glassdoor provides our best prediction for total pay in today's job market, So what's the difference now? But fuel was up 54%. Kyle Arnold is the aviation writer for The Dallas Morning News, covering airlines, air travel and the aerospace industry. Is there less growth because we're just going to continue this? I'd also add to -- there's a comp here. Southwest Airlines Company So, that's the primary culprit here as we look at 2023. And what are the circumstances that would cause you to raise your CASM expectations again this year? There may be marginal improvements in different parts of the country, but it largely is what it is. As an example, on the aircraft that we have where we have improved and enhanced Wi-Fi, the investments are paying off. Premium. I just want to reiterate that we have a solid plan and our work is on track. Turning to our fleet. We're in the process of refining our published flight schedules post summer as we are reevaluating our flight schedule plans for our yet to be published November-December flight schedules. Southwest has been profitable for 44 years in a row. I think if you look at managed business, travel, sitting here today and kind of where it sits structurally relative to kind of where it's been historically, there's a couple of things at play that have reduced managed travel kind of for the industry. Southwest Airlines Takes a Different Path Through the Pandemic 72 km westlich vonWien, nur einen Steinwurf von der Donauund den Weinbergen entfernt, wohnen wirnicht nur, sondern laden auch seit vielenJahren zu verschiedensten kulturellen Aktivitten. It just seems like when looking across the other airlines, they're one and three quarter basis points ahead of where Southwest finished first quarter in load factor. Thanks, Chad, and we appreciate you all joining us today. And do you know by how many jobs you're going to change your target? A quick reminder that we will make forward-looking statements, which are based on our current expectation of future performance, and our actual results could differ materially from expectations. And in the context of like a high single-digit growth rate, is the assumption going forward that a lot of these transitory costs are actually going to allow you to have CASM-X decline next year? 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And then, how do you think about '24 -- I'm just trying to parse out like how the growth may play out for you next year. Published by Statista Research Department , Mar 23, 2023. Somebody that's not already loyal, what's the value proposition for flying Southwest these days? We got 50% of June booked at this point. How Much Does Southwest Airlines Pay in 2023? (6,311 We gained a point of market share in the managed travel space over the last quarter. So, please refer to the disclosures in our press release from this morning and visit our investor relations website for more information. Employees as expenses vs. employees as assets; Compensation below market, above market, or competitive; Spontaneous training and development or planned training and development; Specific