A shareholder asked Gary Kelly about buying a gas field at today's annual meeting and GK took a swipe at Delta:
When a shareholder asked Kelly whether the airline would think about buying a natural gas field as a hedge against rising fuel prices, Kelly acknowledged that managing its fuel costs "is a huge challenge." Southwest already enters into derivative contracts to try to soften the price swings of jet fuel. Getting into the natural gas business would force it to manage that risk, too.
"In all humility, we would admit to you, we don't know the oil and gas business, and the airline business keeps us pretty busy as it is," Kelly said. "We don't want to take what is already a high-risk business and make it even riskier."
Additionally, WN has deferred delivery of 30 new 738s for four years.
SANdyFlyer
May 16, 12, 3:34 pm
WN is deferring delivery of their 737-800s?!? To me, that is much bigger news than the fuel comment. Many considered the 737-800 to be a requirement for WN opening up new routes (international, Hawaii, etc). I'm assuming this implies that any consideration towards those new routes are getting pushed back as well. I imagine that troubles with the FL merger are not helping....
nsx
May 16, 12, 3:37 pm
Additionally, WN has deferred delivery of 30 new 738s for four years.
FOUR YEARS???
Time to say Aloha to Hawaii service. And I don't mean "Hello".
SANdyFlyer
May 16, 12, 3:44 pm
I simply don't get it! Why parade the new 737-800 'Warrior One' around and talk about the new 'future' of Southwest to only delay the order by FOUR YEARS a few weeks later??? If this was in the works, why not let news of the one 737-800 delivery simply go away quietly in the night.
FWAAA
May 16, 12, 3:45 pm
Generally, airlines expand when they enjoy a cost advantage to the competition, which usually forces the competition to contract (or to expand much more slowly). After many years of being the low-cost provider and many years of expansion, Southwest is now a very big airline and expansion won't be easy as long as the others enjoy bankruptcy-assisted low costs.
That big airline in Fort Worth, after years of refusing to join that crowd, is rapidly moving toward that same low-cost advantage enjoyed by UA, DL and US. As GK told the employees in late November, there's no shortage of challenges ahead of WN. I'm confident that WN and its employees will rise to the challenge, but it may not be smooth sailing the entire way. Slowing down the deliveries may be a very prudent thing to do.
nsx
May 16, 12, 3:48 pm
I wonder if this is a positioning move for union negotiations, allowing management to offer to reinstate the -800 deliveries if the unions give them some concession.
OPNLguy
May 16, 12, 3:48 pm
WN is deferring delivery of their 737-800s?!? To me, that is much bigger news than the fuel comment. Many considered the 737-800 to be a requirement for WN opening up new routes (international, Hawaii, etc). I'm assuming this implies that any consideration towards those new routes are getting pushed back as well. I imagine that troubles with the FL merger are not helping....
Of the 34 -800s being delivered in 2012, 28 will be ETOPS-capable, as the above article indicates...
FlyingVajra
May 16, 12, 3:52 pm
Interesting news on both items, fuel and jet delivery. I understand the idea behind it, but I can't say that reading the headline "Delta Buys Refinery" gave me any more confidence in their management.
Deferred deliveries don't worry me much as that schedule can always be changed and usually means prudent planning. I'd be worried if WN had cancelled them outright, though.
"That big airline in Fort Worth, after years of refusing to join that crowd, is rapidly moving toward that same low-cost advantage enjoyed by UA, DL and US."
Perhaps but that "big airline" does not have the LCC culture or mentality, something that continues to plague UA, DL and US. They can cut costs but if they still "think big" it will be as much of a headache for AA as the others.
FWAAA
May 16, 12, 3:54 pm
No, just some of them...
Yes, the deferred 738s were among the 45 expected deliveries in 2013 and 2014. Nothing about deferring the 33 (or 34) 2012 deliveries.
Of the 34 -800s being delivered in 2012, 28 will be ETOPS-capable, as the above article indicates...
Thank you for clarifying OPNLGuy! I was a little concerned as the article in the original post made no mention of any deliveries for this year. Fortunately a false alarm :)
OPNLguy
May 16, 12, 3:59 pm
Thank you for clarifying OPNLGuy! I was a little concerned as the article in the original post made no mention of any deliveries for this year. Fortunately a false alarm :)
This article mentions the revised number of deliveries for 2013 and 2014...
The same article above also mentions how this is all "bad news" for Boeing. With a backlog of 1,530 unfilled 737-800 orders as of April, the delaying of a mere 30 of then for 4 years strikes me as a drop in their proverbial bucket. It's not as if the 30 were cancelled. Media hyperbole?
Of the 34 -800s being delivered in 2012, 28 will be ETOPS-capable, as the above article indicates...
Yes, but I've also read that WN converted all it's 700 orders for 2013 and part of its 2014 order to 800-series aircraft. This sounds like no deliveries will be taken in 2013. What about 2014?
Will certainly slow down retiring the 737-300 aircraft.
NM: Looks like the 30 aircraft is just part of the delivery.
OPNLguy
May 16, 12, 4:09 pm
Yes, but I've also read that WN converted all it's 700 orders for 2013 and part of its 2014 order to 800-series aircraft. This sounds like no deliveries will be taken in 2013. What about 2014?
Will certainly slow down retiring the 737-700 aircraft.
From the link in reply #11:
"Southwest will now receive only 20 737-800s in 2013, and 24 in 2014, along with five 737-700s."
As far as retirements of -700s, there haven't been any. Our first deliveries of them were in the fall of 1997, so with the oldest of them being only 15 years old, it'll be quite a while before they start getting retired. It's the -300s and soon -500s that are being retired.
FWAAA
May 16, 12, 4:11 pm
Yes, but I've also read that WN converted all it's 700 orders for 2013 and part of its 2014 order to 800-series aircraft. This sounds like no deliveries will be taken in 2013. What about 2014?
In the 10-K, as of January 12, 2012, WN had 41 738s scheduled for delivery in 2013 plus four more 738s in 2013 plus 35 73Gsd (some or all of which may have been converted to 738s). Even after today's announcement, WN will take delivery of at least 15 738s (and maybe quite a few more) in 2013-14. Plus the 33 in 2012.
texashoser
May 16, 12, 4:14 pm
From the link in reply #11:
"Southwest will now receive only 20 737-800s in 2013, and 24 in 2014, along with five 737-700s."
As far as retirements of -700s, there haven't been any. Our first deliveries of them were in the fall of 1997, so with the oldest of them being only 15 years old, it'll be quite a while before they start getting retired. It's the -300s and soon -500s that are being retired.
Sorry, I meant retirement of the 300-series aircraft. So yeah, if the total number stays the same, that means 30 737-300 aircraft that had been marked for retirement by the end of 2014 will still be in service.
Also read that instead of taking 737-800 orders in 2017/2018, Southwest might take 737 MAX 8 orders.
Open, do you know what the 2015/2016 schedule is?
texashoser
May 16, 12, 4:17 pm
Even after today's announcement, WN will take delivery of at least 15 738s (and maybe quite a few more) in 2013-14. Plus the 33 in 2012.
Actually, the third article posted by open indicates WN will take 44 738 orders in 2013/2014.
OPNLguy
May 16, 12, 4:20 pm
Sorry, I meant retirement of the 300-series aircraft. So yeah, if the total number stays the same, that means 30 737-300 aircraft that had been marked for retirement by the end of 2014 will still be in service.
Also read that instead of taking 737-800 orders in 2017/2018, Southwest might take 737 MAX 8 orders.
Open, do you know what the 2015/2016 schedule is?
No, I don't, but there might be something in the most recent 8K filing.
I was just watching one of the 5pm newcasts here, and while they factually reported that the delivery of 30 aircraft were being deferred, they kind of flunked the "context" part by not mentioning there would still be some deliveries in the years the 30 were being deferred from. Oh well... :rolleyes:
expert7700
May 16, 12, 4:28 pm
A footnote in the annual report mentions:
(a) The Company has flexibility to substitute 737-800s or 737-600s in lieu of 737-700 firm orders
Another interesting portion:
As of December 31, 2011, there were approximately 1.3 million previously issued flight awards still outstanding under the previous program and approximately 2.6 million partially earned awards outstanding.
However, the Company believes a significant portion of these flight awards and partially earned awards will expire without being used, as they are not transferable to the Company’s new frequent flyer program. Award travel available to members of AirTran’s A+ program as of December 31, 2011, was not significant to the Company. The amount of points redeemed by Southwest’s members and the number of credits redeemed by AirTran’s members during 2011 for items other than air travel was not material.
toomanybooks
May 16, 12, 4:43 pm
A shareholder asked Gary Kelly about buying a gas field at today's annual meeting and GK took a swipe at Delta:
Did anyone ask him why WN's IT sucks so bad?
InkUnderNails
May 16, 12, 7:50 pm
Did anyone ask him why WN's IT sucks so bad?
He was trying to research that answer, but his computer timed out to an OOPS! screen.
FWAAA
May 16, 12, 8:33 pm
Did anyone ask him why WN's IT sucks so bad?
He was trying to research that answer, but his computer timed out to an OOPS! screen.
:D :D
I don't know enough about the technical details, but I've been unhappy with the WN site ever since it became "interactive" instead of simple radio buttons with pull down lists several years ago. IME, websites slow down and become much more clunky the more they "evolve."
That said, there's a whole lot more wrong with WN IT than just the user interface, but it's the part that gets me ranting and raving.
GVretiredguy
May 17, 12, 12:29 am
:D:D:D:D:D
Insiders say that once they can operate a 24 hour sale without everyone getting timed-out, they will consider the oil & gas business. I think it is safe to say that we will not see movement into the gas & oil biz in our lifetimes !!!
OPNLguy
May 18, 12, 10:56 am
A footnote in the annual report mentions:
(a) The Company has flexibility to substitute 737-800s or 737-600s in lieu of 737-700 firm orders
Another interesting portion:
As of December 31, 2011, there were approximately 1.3 million previously issued flight awards still outstanding under the previous program and approximately 2.6 million partially earned awards outstanding.
However, the Company believes a significant portion of these flight awards and partially earned awards will expire without being used, as they are not transferable to the Company’s new frequent flyer program. Award travel available to members of AirTran’s A+ program as of December 31, 2011, was not significant to the Company. The amount of points redeemed by Southwest’s members and the number of credits redeemed by AirTran’s members during 2011 for items other than air travel was not material.
Just ran into this post elsewhere, and it shows planned deliveries. As the text notes, it does NOT reflect the recently announced -800 deferrals, so folks will need to factor those in manually.
Just ran into this post elsewhere, and it shows planned deliveries. As the text notes, it does NOT reflect the recently announced -800 deferrals, so folks will need to factor those in manually.
I wonder how many of those 67 700 orders will converted to 800 series aircraft for years 2015 and 2016.
jn in ca
May 18, 12, 3:30 pm
:D :D
I don't know enough about the technical details, but I've been unhappy with the WN site ever since it became "interactive" instead of simple radio buttons with pull down lists several years ago. IME, websites slow down and become much more clunky the more they "evolve."
That said, there's a whole lot more wrong with WN IT than just the user interface, but it's the part that gets me ranting and raving.
That's been a trend among web developers for years. Their theory is that their servers are overloaded, but your home PC is loafing, therefore they try to move as much of the webpage interaction to your local machine as they can.
The downside is that unless your machine is configured exactly as they would like it to be, your user experience is going to plummet; but hey, they can tell the "IT unaware" boss that they freed up resources on their end, and as for your end: you're just a lowly paying customer. :(
It's best when these websites leave a lite (maybe text only) version accessible, for those of us who do not want the bells and whistles. :)