o Plan to exceed ROIC target 15% in 2015.
o Idea for SWA DAL longhaul buildup spurred by Delta pull down at DFW
o Sees "modest" trimming of DAL shorthaul flying to make room for more longer flights.
o Sees daily ops at DAL climbing from 120 to 150. Similar in size to HOU
o MDW largest hub - about 250 departures
o Top-10 cities are "crown jewels" - key growth focus
o Likes serving multiple airports in metro market since most pax are point to point and this get them closest to where they want to be
o ATL is a big market - will continue to have big presence - focused on where locals want to go.
o 75% of AirTran integration complete. Last flight December 28th.
o AirTran gave Southwest many things - esp NYC and DC.
o SWA was prior viewed as heavily leisure airline in Eastern US.
o SWA to be 2nd largest carrier at DCA by end of 2014. From 17 to 44 flights.
o No plans for any aircraft type other than 737 family
o 737MAX entry to service 3Q 2017.
o "pivoting" to use 738 on longer stage lengths.
o Updated cabins coming also in about 6 months. Revised Evolve seat bottoms and improved cabin durability features.
o No power outlets on board, but adding more of them them at airports
o Not planning seperate premium economy/extra legroom product. Tension between revenue vs space vs cost.
o Always keeps an eye on used a/c market.
o Sees under served route opportunities to Canada, however high airport fees and taxes are a challenge
o But be "surprised" if not serving Canada by end of decade.
o New reservations system - Amadeus exceeded expectations. Smooth roll out
o GDS distribution more important for international flying where consumer internet purchasing not as high
o With new res system will have option to open up sales window further than current 6-months
o Identified easily 50 destinations outside the US that are good fit
o Self bag tagging testing in DAL. LAX likely first major roll out.
o While technology is great, machinery cant replace head and heart of employees.
o Focus is back on On Time performance. Numbers bounced back - as of late August was 84% OT
o Tighter scheduling in 2013 gave SWA equivalent of 16 extra aircraft, but also hurt OT.
o Greater utilization planned in 2015. ~3% growth with same fleet count
o Growth through 2017 at or below GDP
o SWA - is "true American airline" - every demographic group is a client on SWA
o Uses a "customer centricity program" to parse customer comments and make marketing decisions
o Bags still fly free - Think that when you go on vacation, it’s not unreasonable to take stuff with you.
o Actually believe charging would be a "loser all around". Estimates SWA earns $1bil from clients that specifically shop SWA because of the free bags, and might not travel otherwise.
o Bags fly free was marketing gift from rest of industry.
o Labor 1/3 of total cost. Wont BK the company to reduce them, but controlling them critical for long term success