Airline implements workforce reduction in corporate and leadership roles DALLAS, Feb. 17, 2025 /PRNewswire/ -- Southwest Airlines Co. (NYSE: LUV) (the "Company") today announced a reduction in its workforce to create a leaner and more agile organization as part of the airline's transformational plan.  The workforce reduction of approximately 1,750 Employee roles is focused almost entirely on corporate overhead and leadership positions and represents approximately 15% of corporate positions, including senior ...

Core Points - Southwest Airlines is cutting approximately 15% of its corporate jobs, equating to about 1,750 positions, in an effort to reduce costs [1][2][3] - The company anticipates net savings of $210 million for the current year and around $300 million by 2026 as a result of these layoffs [2] - CEO Bob Jordan described the layoffs as "unprecedented" in the company's 53-year history, emphasizing the need for transformation into a more efficient organization [3]

Core Insights - Southwest Airlines has appointed Tom Doxey as Executive Vice President & Chief Financial Officer effective March 10, 2025, bringing extensive experience in aviation finance and operations [1][2] - Doxey's previous role as President of Breeze Airways saw him lead the airline to profitability in under two years, focusing on brand development and operational optimization [2] - His background includes significant leadership positions at United Airlines, where he managed a $5 billion budget and oversaw strategic initiatives during the pandemic [3] Company Overview - Southwest Airlines operates one of the most admired airlines globally, serving 117 airports across 11 countries and carrying more air travelers within the U.S. than any other airline [6][7] - The airline emphasizes a commitment to low-cost air travel and customer service, with over 72,000 employees dedicated to delivering hospitality [6] - In 2024, Southwest Airlines carried more than 140 million customers, showcasing its strong market presence and customer loyalty [6]

Fuel Costs and Efficiency - The Company's fuel cost in 2024 was $5,812 million, with a cost per gallon of $2.64, representing a 21.4% operating expense percentage[22]. - The Company achieved 80.8 available seat miles per fuel gallon consumed in 2024, an increase from 79.5 in 2023[24]. - Jet fuel and oil represented approximately 21.4% of the Company's operating expenses for 2024, with fuel and oil expenses remaining high due to increased fuel gallons consumed[168]. - The introduction of the MAX aircraft into the fleet is expected to improve fuel efficiency and reduce CO₂ emissions per ASM compared to previous aircraft[68]. - The Company is actively pursuing environmental sustainability goals, including increased use of sustainable aviation fuel (SAF) and improved fuel efficiency initiatives[71]. Employee and Labor Relations - Salaries, wages, and benefits accounted for approximately 45.1% of the Company's operating expenses in 2024, with a reduction of 2,356 full-time equivalent employees, or 3.1% from year-end 2023[25]. - The Company had 72,450 active full-time equivalent employees as of December 31, 2024, with 82% represented by labor unions[143][145]. - The Company has ratified new contracts with all 12 union-represented workgroups, which collectively represent approximately 82% of its Employees[151]. - The Company regularly conducts Employee surveys to assess job satisfaction and uses the feedback to improve its ability to attract and retain talent[150]. - The Company has implemented strong Employee training and benefits programs, including a competitive compensation package and a Retirement Savings Plan with a dollar-for-dollar match for Employees[149]. Technology and Innovation - The Company plans to invest over $2 billion over five years to modernize and transform the customer experience, including enhanced WiFi and in-seat power ports[44]. - Significant investments in technology include replacing the legacy flight planning system and implementing a new revenue management system during 2023[66]. - The Company is committed to enhancing its technology systems, focusing on efficiency and reliability, with ongoing investments expected to continue[67]. - The Company has implemented technology to comply with ADS-B requirements, aimed at enhancing safety and efficiency in air traffic management[98]. - The Company is expanding its use of AI and machine-learning technologies, which presents operational, legal, and competitive risks, including potential cybersecurity vulnerabilities and algorithmic biases[202]. Customer Experience and Marketing - The Company’s fare structure includes four major categories, with "Wanna Get Away" fares being the lowest and often subject to advance purchase requirements[26][27]. - The Rapid Rewards loyalty program allows members to earn points for every dollar spent, with no blackout dates for redeeming points[36]. - In 2024, flight awards redeemed totaled 10.1 million, accounting for approximately 14.7% of revenue passenger miles flown, down from 16.3% in 2023[43]. - The company introduced a new vacation package product called "Getaways by Southwest," expected to drive growth with leisure travelers beginning in 2025[50]. - The company launched a new marketing campaign, "The Big Flex," to highlight its customer-friendly policies and flexible fare options[53]. Regulatory and Compliance Challenges - The Company is subject to various federal, state, and local health regulations, which may impact costs and performance due to new health requirements related to communicable diseases[100]. - The FAA has finalized a new rule requiring airplane manufacturers to install a physical secondary barrier between the flight deck and cabin, with compliance required by August 25, 2025, potentially imposing substantial costs on the company[96]. - The Company faces potential increased costs due to compliance with new climate-related disclosure laws and regulations[110]. - The Company must comply with evolving data privacy and cybersecurity regulations, including the Payment Card Industry Data Security Standards (PCI DSS)[116]. - The SEC's new rules on cybersecurity risk management became effective in December 2023, imposing additional compliance requirements on the Company[118]. Operational Efficiency and Challenges - The Company is focused on improving operational efficiency through various technology initiatives, including crew mobility and scheduling enhancements[67]. - The Company is facing potential costs related to PFAS regulations, as the EPA has listed certain PFAS compounds as hazardous substances, which could lead to significant liability and remediation costs[106]. - The Company has experienced operational challenges due to severe weather events, impacting its business and financial condition, with notable incidents including Hurricanes Harvey and Irma in 2017 and Winter Storm Elliott in December 2022[196]. - The Company is dependent on Boeing as the sole manufacturer of its aircraft, which poses risks if there are delivery delays or availability issues[163]. - The Company faces risks from airport capacity constraints and air traffic control inefficiencies, which could limit growth opportunities[217]. Financial Performance and Strategy - The Company received gross proceeds of $871 million from the sale-leaseback of 35 aircraft in December 2024, aimed at supporting capital allocation strategies[22]. - The Company has maintained its investment-grade rating from all three major credit agencies, supporting its strategic plans and initiatives[139]. - The Company is focusing on maintaining manageable debt maturities to preserve its balance sheet strength and return value to shareholders through dividends and share repurchases[139]. - The airline industry faced inflationary cost pressures, particularly in labor, and the Company is adjusting its route network and capacity growth for 2025[127][128]. - The Company is adapting to changing travel patterns and competition from alternatives to air travel, such as videoconferencing and surface transportation[140][141].

DALLAS, Feb. 6, 2025 /PRNewswire/ -- Southwest Airlines Co. (NYSE: LUV) today announced it has extended its flight schedule through Nov. 1, 2025. The airline continues bringing new and more nonstop flights for travelers as it grows in key cities across the country and beyond. Flights are now available for booking at Southwest.com. Growing San DiegoWith the anticipated opening of a new terminal at the San Diego International Airport, Southwest Airlines® will see several seasonal routes return to the schedule ...

DALLAS, Feb. 5, 2025 /PRNewswire/ -- Southwest Airlines Co. (NYSE: LUV) Board of Directors declared a quarterly cash dividend of $.18 per share to Shareholders of record at the close of business on March 12, 2025, on all shares then issued and outstanding. The quarterly dividend will be paid on April 2, 2025. SW-DSR SOURCE Southwest Airlines Co. ...

Financial Data and Key Metrics - Q4 2024 RASM increased by 8% YoY, exceeding prior guidance of 5.5% to 7% [13][27] - Q4 2024 CASM-X increased by 11.1% YoY, driven by inflationary pressures and wage rate increases [50] - Full-year 2024 CASM-X increased by 7.8% YoY, including a $92 million gain from a sale-leaseback transaction [50] - The company expects Q1 2025 RASM to grow 5% to 7% YoY [32] - The company targets $1 billion EBIT contribution from core business initiatives in 2025, excluding fleet transactions [19][70] Business Line Performance - The company achieved industry-leading completion factors with less than 1% of flights canceled in 2024 [26] - Revenue management initiatives yielded faster-than-expected benefits, with flights above 90% load factor showing strong close-in performance [30][31] - The company plans to launch assigned and premium seating in the second half of 2025, with retrofitting starting mid-year [39][40] - Redeye flights will be introduced in 5 key markets in February 2025, expanding to 33 markets by June 2025 [45][46] Market Performance - The company signed its first commercial agreement with Icelandair, expanding customer connectivity across the Atlantic [35][36] - MGM Resorts International was added as a partner for the Getaways by Southwest product, enhancing access to Las Vegas hotel inventory [38] - The company expects revenue contributions from partnerships, Getaways, and loyalty initiatives, particularly in Q4 2025 [34] Strategy and Industry Competition - The Southwest Even Better plan focuses on efficiency, cost reduction, and customer experience enhancements, including redeye flights and faster aircraft turn times [10][11][45] - The company is pursuing a $500 million cost initiative to mitigate inflation and improve efficiency, with a focus on corporate overhead reduction [16][17] - The company is modernizing its fleet, aiming for an all-737-7 and -8 fleet by 2031, with plans to retire 51 aircraft and sell 10 -800NGs in 2025 [56][57] Management Commentary on Operating Environment and Future Outlook - Management highlighted a constructive industry backdrop with strong demand and capacity moderation [14][27] - The company is optimistic about Boeing's production ramp-up, planning conservatively for 38 deliveries in 2025 but expecting upside potential [20][22] - Management emphasized the importance of maintaining a strong balance sheet and delivering shareholder returns through dividends and share repurchases [66][67] Other Important Information - The company achieved ISO certification for IATA operational safety audit, reinforcing its commitment to safety standards [37] - Digital enhancements have reduced call center volumes, improving operational efficiency [47] - The company updated its co-brand agreement with Chase, enabling new benefits related to assigned and premium seating [41][42] Q&A Summary Question: Unit cost cadence for 2025 - The company expects unit cost growth to moderate to low-single digits by Q4 2025, driven by turn and redeye initiatives, labor contract impacts, and cost reduction efforts [82][83] Question: Long-term unit cost growth potential - Management sees potential for low-single-digit CASM-X growth in 2026 and 2027, supported by labor contract certainty and efficiency initiatives [93][94] Question: Fleet monetization strategy - The company plans to execute sales and sale-leasebacks opportunistically, with a focus on NPV-positive transactions [104][105] - The bulk of the EBIT contribution from fleet strategy will come from sales of excess aircraft, dependent on Boeing deliveries [107][108] Question: Revenue management impact - Revenue management initiatives contributed significantly to Q4 2024 RASM growth, with further benefits expected in 2025 [117][118] Question: Industry capacity outlook - Management expects a constructive industry backdrop to persist due to ongoing supply chain constraints and manufacturing challenges [145][146] Question: Premium seating progress - The company is on track to begin selling assigned and premium seating in H2 2025, with retrofitting starting mid-year [39][40][148]

Core Viewpoint - Southwest Airlines Co. reported a strong fourth-quarter performance with earnings per share of 56 cents, exceeding estimates and showing a significant year-over-year improvement of 51.5% [1] Financial Performance - Revenues for the quarter were $6.93 billion, slightly missing the consensus estimate of $6.95 billion, but reflecting a year-over-year increase of 1.6% due to effective tactical actions and strong demand [2] - Operating income was reported at $278 million, a turnaround from an operating loss of $404 million in the same quarter last year, with adjusted operating income at $397 million compared to $182 million previously [5] - Total adjusted operating expenses increased by 6.3% year over year [5] Operating Statistics - Revenue passenger miles decreased by 3.1% year over year to 34.47 billion, while available seat miles fell by 4.4% to 43.53 billion, leading to a load factor increase of 1 percentage point to 79.2% [3] - Passenger revenue per available seat mile (PRASM) grew by 6.2% year over year to 14.49 cents, and revenue per available seat mile (RASM) also increased by 6.2% to 15.92 cents [3][4] Cost and Liquidity - Fuel costs per gallon decreased by 19.3% year over year to $2.42, while consolidated unit cost (CASM) excluding fuel and special items rose by 11.1% [6] - The company ended the quarter with cash and cash equivalents of $7.50 billion, down from $8.50 billion in the previous quarter, and long-term debt remained stable at $5.06 billion [7] Shareholder Returns and Future Outlook - Southwest Airlines returned $680 million to shareholders through dividends and share repurchases in 2024 and announced a $750 million accelerated share repurchase program [8] - For Q1 2025, ASMs are expected to decline by 2%-3%, with economic fuel costs projected between $2.50 and $2.60 per gallon, and RASM anticipated to increase by 5-7% [8] - The company aims for an operating margin of more than 10% by 2027 and expects ROIC to increase by more than 15% [10]

Financial Performance - For the quarter ended December 2024, Southwest Airlines reported revenue of $6.93 billion, an increase of 1.6% year-over-year [1] - EPS for the quarter was $0.56, compared to $0.37 in the same quarter last year, representing a significant increase [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $6.95 billion, resulting in a surprise of -0.23% [1] - The company delivered an EPS surprise of +24.44%, with the consensus EPS estimate being $0.45 [1] Key Metrics - Load factor was 79.2%, below the five-analyst average estimate of 81.8% [4] - Revenue passenger miles (RPMs) totaled 34.47 billion, compared to the four-analyst average estimate of 35.71 billion [4] - Available seat miles (ASMs) were reported at 43.53 billion, slightly below the four-analyst average estimate of 43.7 billion [4] - Passenger revenue per ASM (PRASM) was 14.49 cents, slightly above the average estimate of 14.45 cents [4] - CASM, excluding fuel and oil expenses, special items, and profit-sharing expenses, was 12.19 cents, compared to the four-analyst average estimate of 12.23 cents [4] - Revenue Per Available Seat Mile (RASM) was 15.92 cents, in line with the four-analyst average estimate of 15.9 cents [4] - Fuel costs per gallon were $2.38, below the three-analyst average estimate of $2.58 [4] - Fuel consumed was 531 million gallons, compared to the estimated 534.92 million gallons [4] - Operating Revenues from Passenger services were $6.31 billion, slightly above the six-analyst average estimate of $6.30 billion, reflecting a year-over-year change of +1.6% [4] - Operating Revenues from Other sources were $579 million, below the six-analyst average estimate of $589.87 million, with a year-over-year change of +2.1% [4] - Operating Revenues from Freight were $45 million, below the six-analyst average estimate of $48.40 million, with a year-over-year change of +2.3% [4] Stock Performance - Shares of Southwest Airlines have returned -5.9% over the past month, while the Zacks S&P 500 composite has changed by +1.2% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Viewpoint - Southwest Airlines reported quarterly earnings of $0.56 per share, exceeding the Zacks Consensus Estimate of $0.45 per share, and showing an increase from $0.37 per share a year ago, representing an earnings surprise of 24.44% [1][2] Financial Performance - The company posted revenues of $6.93 billion for the quarter ended December 2024, slightly missing the Zacks Consensus Estimate by 0.23%, compared to $6.82 billion in the same quarter last year [2] - Over the last four quarters, Southwest has surpassed consensus EPS estimates three times and topped revenue estimates two times [2] Stock Performance - Southwest shares have declined approximately 5.9% since the beginning of the year, while the S&P 500 has gained 2.7% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.12 on revenues of $6.59 billion, and for the current fiscal year, it is $1.54 on revenues of $29.14 billion [7] Industry Outlook - The Transportation - Airline industry is currently ranked in the top 26% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5][6]