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It used to be that New Years Day capped the end of the holiday season, but it really doesn’t seem that way any more.  Back in the day, the big four bowl games were all on January 1, and once they were complete, it was back to the grind until Thanksgiving of the New Year.  Then along came the Super Bowl in late January, which helped to extend the holidays.  Now the big game is in February, and who knows, it may one day be played during baseball spring training.  Then more “holiday creep” began with the BCS taking over the big bowls.  Some of them are now played on the days after New Years Day, and the BCS “National Championship” game is played a week after that. I’ve probably slept through more New Year’s ball droppings than I should admit to.  I swear that I really am not an old “fuddy-duddy,” but in some ways, December 31 and January 1 seem to be just days on a calendar.  It wasn’t always like that.   Right after college, I went to a New Year’s party at a friend’s apartment, and I imbibed too many adult beverages.  (To this day, lime daiquiris make me ill.)  Rather than foolishly driving home drunk, I spent the night there and slept in the roommate’s bedroom.  I called my parents to let them know I was behaving safely and not driving, and that “conversation” has become a classic around my family.  I can still remember it verbatim:  “Hello Mom?  Hi, it’s Brian.  Look I’ve had a little too much to drink, so I am spending tonight here in Nancy’s bed.  But, don’t worry, Nancy is out of town!” (Which was true.) That’s probably the “wildest” New Year’s Eve I’ve encountered.  I can remember a few years earlier in 1972 going to a party in college and being bored out of my mind.  During college holiday break the year before, I went to visit a classmate in Hutchison, Kansas.  I flew up to Wichita around New Years, and then we drove back down to Dallas a week or so later.  When the New Year dawned in 1974, I faced it as a college graduate, having completed my degree a few weeks earlier—and I had a job at my alma mater, which considering that 1974 was a big recessionary year was an accomplishment.  Probably my best “young” New Years came when I was a senior in high school.  As some of you know, I spent part of my childhood in Southern California, and my best childhood friend Herb and I loved to take train trips.  That year, he flew from L.A. to Dallas to visit, and we flew up to Oklahoma City a day or two before New Years Day 1970 to take Santa Fe’s Texas Chief from there back to Fort Worth.  The train was packed with football fans from Notre Dame who were travelling to the Cotton Bowl in Dallas.  This was the first time that Notre Dame had played in a bowl since 1925, so it was a festive and memorable ride. Speaking of Cotton Bowls, I attended the 1969 game with my father.  Darrell Royal’s Texas Longhorns defeated the Tennessee Volunteers.  That day was sunny and cold.  In 1975, I saw Joe Paterno’s Nittany Lions from Penn State defeat the Southwest Conference Champion Baylor Bears.  That day was miserably cold and wet. I paid special attention when 1999 turned to 2000.  All day I spent watching the Y2K coverage on television, and toward evening, it was time to breathe a sigh of relief that humanity had survived the onslaught of the computer age.  By midnight here in Dallas, I was thinking “no sweat” and was watching the local celebrations from downtown.  (My wife, Tina, has absolutely no interest in any New Year’s “to do” and had already gone to bed.)  Imagine my surprise when the power shut down five minutes into the new millennium.  Turns out it was a minor glitch with power being restored shortly, but it did give me pause. Another unique New Years happened when I was living in Portland, Oregon.  Tina had gone back to Indiana to see family, and I was watching New Years Day football.  Out of the blue late that morning, I heard a huge explosion and wondered what in the world was happening.  The evening news reported that a poor soul had committed suicide by blowing up his house with natural gas.  As you can see, my New Years have been a mix of the bitter with the sweet, yet I’ve always looked at the upcoming year as a new beginning.  I’d LUV to hear some of your memorable New Year’s memories, so leave a comment below.  From all of my Southwest Coworkers, we wish you a very Happy New Year. ... View more

DALLAS, Dec 28, 2009 /PRNewswire-FirstCall via COMTEX/ -- Southwest Airlines and the International Brotherhood of Teamsters (IBT) Airlines Division, representing the carrier's Stock Clerks announced today the two parties have reached a tentative agreement. The tentative agreement is for a new, five-year contract through August 16, 2013. The current contract became amendable on August 16, 2008. "I applaud the negotiation teams for recognizing the importance of this new tentative agreement, which delivers wage and benefit enhancements in exchange for work rule improvements and contract flexibility," said Mike Van de Ven, Southwest Airlines Executive Vice President and Chief Operating Officer. "This agreement demonstrates IBT's commitment to maintain Southwest's unique Culture, competitive position, and financial strength during this challenging time in the airline industry." In the upcoming weeks, the IBT membership will be given the full details of the agreement and have the opportunity to vote on ratification. IBT represents more than 170 Southwest Airlines Employees. After more than 38 years of service, Southwest Airlines, the nation's leading low-fare carrier, continues to stand above other airlines--offering a reliable product with exemplary Customer Service. Southwest Airlines is the most productive airline in the sky and offers Customers a comfortable traveling experience with all premium leather seats and plenty of legroom. Southwest Airlines (NYSE: LUV), the nation's largest carrier in terms of originating domestic passengers boarded, currently serves 68 cities in 35 states. Based in Dallas, Southwest operates more than 3,100 flights a day and has nearly 35,000 Employees systemwide. www.southwest.com SOURCE Southwest Airlines     ... View more

This year marks my 58th Christmas (one of these days, I will decide on what I want to be when I grow up), and I have some favorite Christmas memories over the years.  My “Santa” years occurred as a young child in Amarillo, and when I think of that time, I have all of these random memories flash by.  I can remember visiting Santa in his “home” on the grounds of the Biven mansion, which was the public library at the time.  My Mom and Dad would make sure that Santa sent me a Western Union telegram from the North Pole (in Colorado) every year to acknowledge my letter to Santa.  Even back then, I was a rabid reader, and I loved to read collections of Charles Schultz’s Peanuts.  That was my favorite Christmas Eve reading because it took my mind off of the events around me.  Even today, I think he did his best work in the early 1960s, and this was the time when he wrote the panels that were the basis of the first Peanuts television special, A Charlie Brown Christmas.  One of the favorite things about that timeperiod was receiving the annual toy catalogs from Sears and, surprisingly, Western Auto.  Western Auto was heavy on model trains from American Flyer, and I used to salivate over the Tonka toy fire trucks and the modern toy garages in the Sears book.  Alas, I never did receive a fire truck. My grandmother (I called her “Mommy”) lived in Stamford, Texas (near Abilene in Central Texas), and she would drive to our house for Christmas.  Mommy was a regular Ford patron, and most of her cars had the window decal of a lasso rope around the words, “Made in Texas by Texans” which was applied to all the cars from Ford’s long-closed Dallas assembly plant.  As she was one of the best customers of the Ford dealer in Stamford, her Christmas gifts usually included a model of the star of Ford’s new car line for the year.  There was a downside to Mommy’s visits, however.  Depending upon my dad’s work schedule, we sometimes opened gifts on Christmas Eve (except for the big "Santa gift').  Mommy was a rabid fan of the Lawrence Welk show, and I can remember that one year, we had to wait to open gifts until the show was over. Those of you my age and over know that printed advertising was much different then.  It often consisted of illustrations with extensive copy that often told a story.  The big weekly magazines like Life, Look, and The Saturday Evening Post were regular outlets for advertisers.  My favorites were the advertisements for the railroads, especially during Christmastime as they opened my imagination to a world beyond Amarillo.  Airlines like TWA were also big magazine advertisers. When we moved to the Los Angeles area, my favorite gifts to receive were airplane models, airplane books, and Matchbox toys in my stocking—I still have all the Matchbox toys.  By the time my family moved to Dallas and I had become a teenager, my “want list” usually consisted of railroad books, which were too expensive for my meager budget.  Thanks to my parents, Santa usually came through, and this cemented my mental association of the great streamliners with holiday travel. Fortunately, as I moved into adulthood and married, the excitement of Christmas revolved around giving.  For the decade we lived in Oregon, we would give items unique to the Northwest, and I couldn’t wait to see my parents’ reaction.  Even though Dad has been gone awhile, I still get a thrill out of having my mom say, “you shouldn’t have.” ... View more

Our friends at the Boeing Company sent us this head's up for the 787's first flight. The Boeing Company is proud to announce the window for first flight is planned to open at 10 a.m. on Dec. 15 at Paine Field in Everett, Wash. This date is dependent upon final internal reviews, taxi test and receiving the final experimental ticket from the U.S. Federal Aviation Administration. We’d like to invite you to view this achievement via the World Wide Web. Our Web site will present a live broadcast of the takeoff, landing and post-flight press conference. You can access this site at www.boeing.com or www.newairplane.com.   When you access boeing.com or newairplane.com, look for a banner like the one contained in this e-mail. The banner will display more information on the timing for first flight. The Web site will go live 24 hours prior to takeoff. The site features information about the airplane and our customers, partners and employees. It also will share videos highlighting other historic first flights and offer a behind-the-scenes look at flight testing.  The Web presentation will begin as the airplane start to taxi to the runway. A Boeing host will set the stage for takeoff. After the airplane leaves the ground, the Web site will carry live updates on flight status. The flight may last as long as three to five hours, so you will probably want to check back often. As the airplane prepares to land, the Boeing host will return and the landing and press conference will be carried live.   Please note that first flights are dynamic in nature and issues such as poor weather may affect timing. Please check the Web site for updates. We hope that you and your colleagues will join us in celebrating the first flight of Boeing’s most advanced commercial airplane. ... View more

DALLAS, Dec. 11 /PRNewswire-FirstCall/ -- As temperatures plummet, Southwest Airlines donates more than 150,000 blankets and more than 30,000 pillows to the Salvation Army. Today's donation of new, individually-packaged blankets and pillows comes at a time when the Salvation Army, and the people it serves, could use it the most. Southwest is donating the blankets and pillows locally to the national organization, which can distribute them to people in need across the country. "Southwest Airlines continues to partner with the Salvation Army in support of the communities we serve," said Debra Benton, Southwest Airlines Director of Community Relations and Charitable Giving. "With the winter months upon us, we know individuals need these blankets and pillows, and we're happy to be able to provide them." Southwest Airlines made a large donation to the Dallas/Fort Worth Command of the Salvation Army today with Southwest Employees helping unload and organize the supplies. In addition, Southwest Employees in markets across the U.S. will drop blankets and pillows at their local Salvation Army. As part of Southwest Airlines' Share the Spirit program, Employees are devoted to each and every community the airline serves. Throughout the year, Southwest Airlines Employees reach out to individuals, families, and entire communities providing help where it is needed. Southwest's Share the Spirit is ingrained in the Company's Culture, and the airline's nearly 35,000 Employees are often the lifeline for those in need. Southwest Airlines (NYSE: LUV), the nation's largest carrier in terms of domestic passengers enplaned, currently serves 68 cities in 35 states. Based in Dallas, Southwest currently operates more than 3,100 flights a day. The Salvation Army's religious and social service activities serve millions of men, women and children in more than 100 nations around the world. Volunteers, contributors, and other supporters make the services possible in local communities across the country. For more information, go to www.salvationarmydfw.org. http://www.southwest.com/?src=PREMNASPRRL0000SA0912/11   SOURCE Southwest Airlines   ... View more

If Steve Heaser were here, he would say something like "direct from the Red Belly Radio Rerun Department."  Unfortunately, Steve is under the weather, so we are opening the vault to replay an earlier podcast he did about the Tuskegee Airmen.   Actually, this is a timely rerun because the Airmen were in Dallas this week on the Southwest campus. ... View more

Travel correspondent Chris McGinnis sent us this link to a YouTube video of Gary Kelly speaking at the NBTA (National Business Travel Association) convention today.  http://www.youtube.com/watch?v=24SxFCHWhJ8 ... View more

Southwest Airlines Begins Boston Logan Service Carrier Now Operates Ten Daily Nonstop Flights to Two Destinations: Chicago Midway and Baltimore/Washington International DALLAS, Aug. 17 /PRNewswire-FirstCall/ -- Southwest Airlines today celebrated the airline's new service at Boston Logan with a uniquely Boston-flavored celebration. Southwest Customers and Employees dined on New England clam chowder and enjoyed the patriotic music of a Minuteman Marching band and a Town Crier who officially proclaimed the opening of Southwest's Logan service. Southwest Airlines Chairman, President and CEO Gary Kelly joined Massport CEO and Executive Director Thomas J. Kinton, Jr., Massport Aviation Director Ed Freni, and Greater Boston Convention and Visitors Bureau President and CEO Patrick Moscaritolo in a morning news conference at Logan to launch the airline's new service. "Today is a great day for the people of Southwest Airlines as well as New England travelers. With our new service here at Logan, Southwest can fully serve the entire Boston area," said Kelly. "Finally all Bostonians can experience our unmatched record in Customer Service, our low fares, and our legendary ontime service, all with the convenience of being located at Logan's Terminal E." Southwest Airlines is now serving Boston travelers from Logan with ten daily nonstop flights - five daily nonstops to Chicago Midway and five daily nonstop flights to Baltimore/Washington International. In addition to the ten daily nonstop flights, Southwest Airlines' new service out of Boston Logan will offer direct or connecting service to 48 other destinations, including: Las Vegas, Phoenix, Denver, Los Angeles, Houston, and San Francisco, just to name a few. Southwest Airlines will operate from gates E1A and E1B in Terminal E at Logan. To view all of Southwest's destinations from Boston Logan, visit http://gallery.swamedia.com/imageSingle/ImageID=SWA2009041418016/tpl2=images/t ype=jpg. "Good things come to those who wait, and Boston Logan has waited some time for Southwest,'' said Kinton, CEO of Massport , which owns and operates Logan. "We are thrilled that the nation's busiest airline based on domestic departures is here, but more importantly, their presence and the 'Southwest effect' of lowering fares will benefit the millions of passengers who use Logan." "We are excited to partner with Southwest Airlines to grow our corporate and leisure visitor markets. The power of Southwest's brand and the desirability of Boston as a visitor destination is a terrific opportunity for our visitor industry," said Moscaritolo, of the Greater Boston Convention & Visitors Bureau. This morning's press conference was one of the many activities organized to commemorate Southwest Airlines' new service to Logan. Throughout the weekend, dozens of Southwest Employees from Boston and across the country celebrated with Customers at its gates and also rolled up their sleeves at a volunteer activity at the Curtis Guild School in East Boston. Approximately three dozen Southwest Employees participated in such projects as planting flowers and bushes; cleaning and organizing, with the help of their community partners at The Container Store, the teachers lounge and classrooms; and painting an enormous 12'x80' mural located along the school's playground. When shopping for Southwest online, it's important to know that Southwest Airlines low fares are only available at www.southwest.com. Not only will Customers find Southwest's great rates online at www.southwest.com, but the site also hosts Southwest's Travel Guide where Customers can check out Boston travel tips posted by travelers who frequent Beantown. Southwest Airlines will continue to celebrate this momentous occasion with a special offer--a bonus Rapid Rewards frequent flyer credit each time you fly into or out of one of our three Boston Area airports between now and September 16, 2009. Visit www.southwest.com/rapid_rewards/rr_promotions.html for more information and to register. After 38 years of service, Southwest Airlines , the nation's leading low-fare carrier, continues to stand above other airlines, offering a reliable product with exemplary Customer Service, and no hidden fees. Southwest Airlines is the most productive airline in the sky and offers Customers a comfortable traveling experience with all premium leather seats and plenty of legroom. Southwest recently updated its gate areas and improved its boarding procedure to make flying Southwest Airlines even more convenient. Southwest Airlines (NYSE: LUV), the nation's largest carrier in terms of domestic passengers enplaned, now serves 67 cities (adding Milwaukee November 1) in 34 states. Based in Dallas, Southwest currently operates more than 3,200 flights a day and has nearly 35,000 Employees systemwide. www.southwest.com   SOURCE Southwest Airlines ... View more

Denver-based Frontier Airline bids differ in aim Some analysts say that Southwest is in a better position to make a deal. By Ann Schrader The Denver Post Posted: 08/02/2009 01:00:00 AM MDT var requestedWidth = 0; if(requestedWidth > 0){ document.getElementById('articleViewerGroup').style.width = requestedWidth + "px"; document.getElementById('articleViewerGroup').style.margin = "0px 0px 10px 10px"; } In a bankruptcy battle for Denver-based Frontier Airlines, cash-flush Southwest Airlines looks to be the winner if it ponies up a binding bid, according to industry analysts watching the fray. Southwest, which on Thursday submitted an initial offer of $113.6 million for Frontier, listed $2.4 billion in unrestricted cash and investments as of July 21, its second-quarter results show. Executives for the Dallas-based carrier said last week that it could borrow on its investment-grade credit rating to acquire Frontier, which filed for Chapter 11 bankruptcy protection in April 2008. "If you are fairly stable financially and have a pile of cash, it's a heck of a time to be out there sniffing around," said Anthony Sabino, a law professor at St. John's University in New York. "It's a classic fire-sale situation, and they're in good position," Sabino said. "It gives them a big edge to be sitting there with $2.4 billion." In comparison, second-quarter results announced last week by Indianapolis-based Republic Airways Holdings — the other bidder for Frontier — showed that it had $97.4 million in unrestricted cash and cash equivalents. On June 22, Republic offered to buy all of the equity in Frontier and its subsidiary, Lynx Aviation, for $108.7 million. The U.S. Bankruptcy Court for the Southern District of New York gave its blessing to Republic's plan on July 13 but gave other investors until Aug. 10 to submit binding bids. Southwest officials have said they'd been studying Frontier for some time. They jumped in last week as a qualified bidder, Southwest corporate secretary Ron Ricks said, so they could comb Frontier's books before deciding to make a formal bid. "We are in this to win," Ricks said shortly after the announcement, "and we have the resources, we think, to be successful." But don't count Republic as a loser in the pursuit for the hand of Frontier. "Republic can make a good return on this regardless," Travelers check in at Frontier Airlines on Thursday, as a potential bidding war began between Southwest and Republic for the airline. (Hyoung Chang | The Denver Post ) said aviation analyst Mike Boyd of Evergreen-based Boyd Group International. "They are going to win no matter what." Republic, which owns Chautauqua Airlines, Republic Airlines and Shuttle America, and on Friday sealed the deal to acquire Midwest Airlines, estimates it accounts for half of the unsecured claims from Frontier creditors. Republic extended a $40 million debtor- in-possession loan in March to Frontier and holds a $150 million unsecured claim from last year. Proceeds from the bankruptcy auction will be used to repay Republic for its investment. Since it is a creditor, Republic representatives theoretically sit on the creditors committee that will help determine the winning bid. "As a member of the creditor committee, they have to step away in supporting or opposing a bid," Sabino said. To be involved "would be inside dealing, so they have to be squeaky clean." Whatever happens between now and a possible auction, likely to occur between Aug. 11-17 should Southwest enter a formal bid, it "should be lively," Sabino said. Sabino doesn't see United Airlines, which is DIA's largest carrier with 48 percent of the market, as making a stab at Frontier. "United is not that far removed from their own bankruptcy," Sabino said, referring to United's Chapter 11 filing in 2002. Sabino said United also is such a huge presence at Denver International Airport that the U.S. Department of Justice would probably frown on a United-Frontier deal. Southwest will prevail, analyst Boyd said, with Southwest and Republic having starkly different motives for the buy. "Republic is not an airline; it's a holding company interested in getting control of a profitable airline, and that is Frontier," Boyd said. "That makes sense. It's a good value." Southwest, Boyd said, "bluntly sees this as an opportunity to buy a competitor, and that's good business." At least one industry analyst wonders why Republic is even in the race. "I've never understood what Republic, a regional operator, is doing with Frontier," aviation analyst Ray Neidl said. "It makes more sense for Southwest, which wants Denver." ... View more

Check out the link above for an interesting interview in the Wall Street Journal's "Middle Seat Blog" with the head of Frontier's Pilot Union.   ... View more

Scott McCartney at the Wall Street Journal shares his thoughts on yesterday's announcement      By Scott McCartney It’s hard to run a huge hub at an airport where Southwest Airlines becomes a strong number two in market share. So the biggest impact of Southwest’s potential bid to buy bankrupt Frontier Airlines may fall on United Airlines. If Southwest is successful in acquiring Frontier in bankruptcy court, the two airlines together will have about 30% of the market at Denver International Airport, with UAL Corp.’s United hanging on to 50%. But United is shrinking, and struggling financially. A bigger fight in Denver with a stronger number-two airline could well weaken United. It might not be long before Southwest could overtake United as the largest carrier in Denver. Southwest has always been a shrewd, opportunistic player. When Midway Airlines shut down years back, Southwest dispatched a virtual SWAT team to the Chicago airport to move in quickly. Southwest jump-started its growth in the west by acquiring Morris Air, and took out a potential irritating competitor in Texas by buying Muse Air. Buying assets of bankrupt ATA Airlines gave Southwest slots and gates at important East Coast airports–plus more gates at Midway–at fire-sale prices. The company has had a keen sense at pegging weak carriers not up for big battles to defend markets (viz. US Airways in Baltimore). Southwest has eaten away at entrenched hubs, weakening Trans World Airlines in St. Louis, for example, and Delta Air Lines in Salt Lake City. As Southwest has grown at Los Angeles International Airport, United has shrunk, from some 240 daily flights to fewer than 100 departures a day. Airline hubs can better compete when Southwest is at a secondary airport, like Houston, Dallas, San Francisco and Chicago. But when the competition is head-to-head, it’s a lot tougher on incumbents. Bob Jordan, executive vice president for strategy and planning at Southwest, notes that Southwest’s growth has already been strong in Denver. The airline started flying to DIA in January 2006 and in three-and-a-half years has grown to 113 flights a day. But combining with Frontier takes that operation to a whole other level. “We’re in this to win,” Mr. Jordan said in an interview. Be careful about betting against them. Comments: o 9:09 am July 31, 2009 o Scott McCartney wrote: About employees and planes: If Southwest ends up the winning bidder, and it has more cash and credit than any other U.S. airline company, Frontier will still be in bankruptcy reorganization for some time and the winning bidder will be able to reject or rework aircraft leases and take advantage of other cost-cutting moves in bankruptcy. Southwest has made it clear it wants Frontier so it will add growth to the company — so it needs to retain planes and people. On planes, Southwest, like any other merged airline, will operate Frontier as a separate unit for some time until full integration can be completed. That includes aircraft. Southwest will likely replace the 51 Airbus jets at Frontier with Boeing 737s. With all the deferred orders out there, Southwest can probably pick up planes quickly if it wants. And it can rework leases on the Airbus jets to fit a 737 delivery schedule. Pilots will be retrained, of course. When I talked to Bob Jordan of Southwest, we talked a bit about seniority integration — something Southwest unions really haven’t done union-to-union. Frontier employees will be folded into Southwest. Southwest pay rates are higher than Frontier contracts, but work rules are different. Where each employee ends up will largely depend on seniority integration. Frontier adds roughly 10% to Southwest’s fleet, and Southwest wants that 10% growth. If it buys Frontier, it’s not to shrink it. –Scott ... View more

The livery of Silver One, Southwest's 25th anniversary specialty aircraft, will change to Canyon Blue when the plane comes in for scheduled maintenance in mid-August. When Silver One was first dedicated in 1996, the fuselage was polished metal. As the process to buff and shine this particular aircraft became too costly, the plane was painted in a silver tone. Within the silver paint, there are flakes that reflect light to give the aircraft a shine. This aircraft has been painted several times with improved paints, and it still doesn’t hold a shine. Southwest wants this aircraft to be a shining representation of this significant milestone in our history, and the grey appearance is simply not doing it justice. When the aircraft is first painted, it displays the sparkle and shine of the silver paint flakes. But over time, due to weather and the elements, these flakes no longer reflect like they do when first applied. So in the time of a few short years, the luster fades and the aircraft appears a dull grey, rather than shining silver. Therefore, Silver One will be painted in the colors of the Spirit Fleet. However, there will be two places on the aircraft that will designate it as Southwest's Silver Anniversary Aircraft. The graphic on the nose of the aircraft will remain the same, along with the dedication art on the windscreen as you enter the aircraft. The change to the Canyon Blue livery should take place in mid- to late-August. ... View more

1,400+ Employees Participate in Freedom '09 The final participation numbers for Freedom '09 are in, and slightly more than 1,400 Employees elected to participate in the voluntary early-out program.  We are very happy for those who decided to make a life change and take the package, but we will be sad to see them leave.  Approved departure dates for these valuable and wonderful Family Members will generally fall between July 31, 2009 and April 15, 2010.  Thanks to each of them for making this difficult decision and for helping the Company better align Customer demand and flight schedules with our staffing. Take a look at today's second quarter financial results news release for relevant financial information. While Freedom '09 is a significant step in the right direction, we still don't know what lies ahead for Southwest Airlines.  We may have more difficult decisions to make as we continue to battle through this unprecedented economic crisis.  Freedom '09 was a one-time offer, and we are so fortunate that we were able to offer this program during this challenging time. The Southwest Airlines Leadership Team continues working diligently to focus on ways to reduce costs, increase revenues, and preserve the jobs of those Family Members who remain.  Thanks to everyone for your openness to the numerous changes that have been made and for fully embracing these efforts.  ... View more

Southwest Airlines Reports Second Quarter Earnings DALLAS, July 21 /PRNewswire-FirstCall/ -- Southwest Airlines (NYSE: LUV) today reported its second quarter 2009 results. Net income for second quarter 2009 was $54 million, or $.07 per diluted share, compared to $321 million, or $.44 per diluted share, for second quarter 2008. Excluding special items, second quarter 2009 net income was $59 million, or $.08 per diluted share, compared to $121 million, or $.16 per diluted share, for second quarter 2008. The second quarter 2009 results, excluding special items, of $.08 per diluted share exceeded Thomson's First Call mean estimate of $.07 per diluted share. Refer to the reconciliation in the accompanying tables for further information regarding special items.     Second Quarter 2009 Financial Highlights:     --  Total operating revenues of $2.6 billion     --  Net income, excluding special items, of $59 million     --  Net income per diluted share, excluding special items, of $.08     --  Cash flow from operations of $135 million     --  Raised $540 million through financing activities     --  Repaid $400 million borrowed in 2008 on our $600 million revolving         credit facility     Second Quarter 2009 Awards & Recognitions:     --  For the sixteenth year in a row, Southwest led the airline industry in         Customer Satisfaction according to the American Customer Satisfaction         Index     --  Ranked among the top ten companies in MSN Money's Customer Service         Hall of Fame     --  Named the Best Low-Cost Carrier and Best Domestic Airline Customer         Service in Executive Travel Magazine's annual Leading Edge Awards     --  Recognized as one of the Top 50 Companies for Supplier Diversity         nationwide by the U.S. Hispanic Chamber of Commerce and PODER 360         magazine     --  Included in BusinessWeek's ranking of the 50 Most Innovative Companies         in the world     --  Southwest Airlines' Rapid Rewards program was again honored in         InsideFlyer magazine's Annual Freddie Awards for Best Award         Redemption, a distinction awarded to Southwest every year since that         award category was introduced eleven years ago Gary C. Kelly, Chairman of the Board, President, and Chief Executive Officer, stated: "In second quarter 2009, we reported a profit. In, without a doubt, one of the worst revenue environments for the airlines, ever, this is an enormous achievement by the Employees of Southwest Airlines. I am exceptionally proud of them, their Warrior Spirits, and their terrific operational and Customer Service results. We continue to stay focused on weathering this economic storm and managing alarming jet fuel price volatility. Thanks to the superb efforts of our People, we have a tremendous body of work completed, underway, and planned to sustain our financial health by enhancing the Customer Experience and generating substantial new revenue opportunities. In that regard, we recently implemented several programs and processes and have more planned for the fall, including the launch of a new and improved southwest.com, and several related products and initiatives. "While our second quarter unit revenue trends outperformed the industry, our total operating revenues were down almost nine percent from a year ago and six percent on a unit basis. Demand for business travel remains weak, and we continue to stimulate traffic with more discounted and promotional fares. Unless demand rebounds significantly, we expect third quarter 2009 unit revenues to decline year-over-year more than the second quarter decline of six percent due to more difficult comparisons. "Our second quarter 2009 unit costs, excluding special items, declined 4.6 percent from second quarter 2008. Even with approximately $60 million in unfavorable cash settlements from derivative contracts in the second quarter 2009, our economic fuel costs decreased 22.8 percent to $1.79 per gallon, including taxes. Although market prices have continued to trend higher since the beginning of the year, we continue to benefit from the decline in energy prices from last year's unprecedented levels. Consequently, based on our third quarter derivative position and current market energy prices, we anticipate our third quarter 2009 economic jet fuel costs, including taxes, to decline significantly year-over-year to the $2.15 per gallon range." As of yesterday, the Company had derivative contracts in place for over 30 percent of its estimated third quarter 2009 fuel consumption and over 45 percent of its estimated fourth quarter 2009 fuel consumption capped at a weighted average crude-equivalent price in the low $70 per barrel range; approximately 50 percent in 2010 capped at a weighted average crude-equivalent price in the mid $70 per barrel range; and modest positions in 2011 through 2013. The total market value (as of yesterday) of the Company's net fuel derivative contracts for the remainder of 2009 through 2013 reflects a net liability of approximately $805 million. Gary Kelly stated, "Excluding fuel, second quarter 2009 unit costs increased 5.8 percent from a year ago, which was better than we anticipated. In addition to other cost containment measures, our hiring freeze remains in place as well as a pay freeze for our officers and senior management. In an effort to better align our staffing with our current capacity needs, we launched a voluntary early-out program during the second quarter and approximately 1,400 Employees have elected to participate. Employee departure dates will fall between July 31, 2009 and April 15, 2010, based on the operational needs of particular work locations and departments. We currently anticipate incurring approximately $70 million ($40 million and $30 million during 2009 and 2010, respectively) in additional costs for the early-out program. We expect annual savings in subsequent years from the program should eventually exceed the cost of the program. We were very pleased that our Flight Attendants, Customer Support and Services, and airport Customer Service Employees voted to ratify their contracts during the second quarter, demonstrating their commitment to sustain the financial strength of the Company. Excluding any charge from the voluntary early-out program, and based on current cost trends and lower available seat miles, we expect our third quarter 2009 unit costs, excluding fuel and special items, to increase from second quarter 2009's 6.91 cents. "We continue our diligent cost control efforts and remain committed to maintaining our competitive cost advantage to sustain our strong low fare brand. However, we are not immune to the effects of the debilitating economic environment. Based on weak travel demand and fuel price volatility, we cannot predict a profitable third quarter 2009. We will continue to take the vital steps we believe are necessary to strategically and financially position ourselves to be able to return to prosperity once travel demand rebounds. "While we plan to reduce our 2009 available seat miles in the five to six percent range versus last year, our continued focus on maximizing the efficiency and profitability of each published flight schedule has positioned us to take advantage of strategic growth opportunities even in this challenging economic environment. We were thrilled to introduce the Southwest brand to the New York market with our inaugural service from LaGuardia on June 28, 2009, and look forward to our service to Boston Logan International, which is scheduled to begin next month, followed by Milwaukee in November. We began service to Minneapolis/St. Paul in March, and both Minneapolis/St. Paul and LaGuardia are off to a strong start." Southwest will discuss its second quarter 2009 results on a conference call at 11:30 a.m. Eastern Time today. A live broadcast of the conference call will be available at http://www.southwest.com/?src=INVRINV2Q09000000090721. Operating Results Total operating revenues for second quarter 2009 decreased 8.8 percent to $2.6 billion, compared to $2.9 billion for second quarter 2008. Total second quarter 2009 operating expenses were $2.5 billion, compared to $2.7 billion in second quarter 2008. Operating income for second quarter 2009 was $123 million, compared to $205 million in second quarter 2008. Excluding special items, operating income was $183 million in second quarter 2009, compared to $242 million last year. "Other expenses" was $73 million for second quarter 2009, compared to other income of $324 million for second quarter 2008. The $397 million swing in total other expenses (income) primarily resulted from $34 million in "other losses" recognized in second quarter 2009 versus $345 million in "other gains" recognized in second quarter 2008. In both periods, these "other (gains) losses" primarily resulted from unrealized gains/losses associated with our fuel hedging program. The cost of the hedging program (which includes the premium costs of derivative contracts) of $37 million in second quarter 2009 and $14 million in second quarter 2008 is also included in "other (gains) losses." Second quarter 2009 interest expense increased $15 million from second quarter 2008 primarily due to financing transactions the Company completed since second quarter 2008. Lower market interest rates coupled with lower Boeing aircraft progress payments generated less capitalized interest in second quarter 2009 compared to the same period last year. Interest income also decreased versus second quarter 2008 due to lower market interest rates. Net cash provided by operations for the six months ended June 30, 2009 was $420 million, which was net of a $185 million increase in cash posted as collateral to the Company's fuel hedge counterparties since December 31, 2008. Capital expenditures for the first half of 2009 were $272 million. During second quarter 2009, the Company borrowed $332 million under a new term loan secured by 14 Boeing 737-700 aircraft and raised $208 million from the sale and leaseback of six 737-700 aircraft. In May 2009, the Company fully repaid the $400 million it had previously borrowed in 2008 under its available revolving credit facility, and as a result, the entire $600 million is fully available. The Company has minimal contractual debt obligations for the remainder of 2009. Following second quarter 2009, the Company borrowed $124 million under a new term loan agreement secured by five Boeing 737-700 aircraft. As of yesterday, the Company has approximately $2.4 billion in cash and short-term investments, net of $425 million in cash collateral paid to its fuel hedge counterparties. The Company's total fuel hedge collateral obligations as of yesterday also required approximately $310 million of aircraft collateral. Total operating revenues for the six months ended June 30, 2009 decreased 7.9 percent to $5.0 billion, while total operating expenses decreased 4.1 percent to $4.9 billion, resulting in operating income in first half 2009 of $73 million versus $293 million in first half 2008. Excluding special items, operating income for first half 2009 was $213 million, a decrease of $128 million, or 37.5 percent. Net loss for the six months ended June 30, 2009 was $37 million, or $.05 loss per diluted share, compared to net income of $355 million, or $.48 per diluted share, for the same period last year. Excluding special items, net income for the six months ended June 30, 2009 was $38 million, or $.05 per diluted share, compared to $164 million, or $.22 per diluted share, for the same period last year. This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Specific forward-looking statements include, without limitation, statements relating to (i) the Company's strategic revenue, cost-cutting, and other initiatives and its expectations related to such initiatives; (ii) the Company's growth plans and expectations; and (iii) the Company's expectations regarding future results of operations. These forward-looking statements are based on the Company's current intent, expectations, and projections and are not guarantees of future performance. These statements involve risks, uncertainties, assumptions, and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in or indicated by them. Factors include, among others, (i) continued unfavorable economic conditions, which could continue to impact the demand for air travel and the Company's ability to adjust fares; (ii) continued volatility in the price and availability of aircraft fuel and any changes in the Company's fuel hedging strategies and positions; (iii) the Company's ability to timely and effectively prioritize its revenue and cost reduction initiatives and its related ability to timely implement, transition, and maintain the necessary information technology systems and infrastructure to support these initiatives; (iv) competitor capacity and load factors; (v) any changes to the Company's business plan and strategies; and (vi) other factors, as described in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008, and under the heading "Forward-looking statements" in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2009.       SOUTHWEST AIRLINES CO.     CONDENSED CONSOLIDATED STATEMENT OF INCOME     (in millions, except per share amounts)     (unaudited)                      Three months ended          Six months ended                          June 30,                   June 30,                          --------                   --------                                        Percent                    Percent                        2009    2008    Change     2009    2008    Change                        ----    ----   --------    ----    ----   --------     OPERATING      REVENUES:       Passenger      $2,506  $2,747       (8.8) $4,758  $5,161       (7.8)       Freight            29      37      (21.6)     58      71      (18.3)       Other              81      85       (4.7)    156     167       (6.6)                         ---     ---                ---     ---         Total          operating          revenues     2,616   2,869       (8.8)  4,972   5,399       (7.9)     OPERATING      EXPENSES:       Salaries,        wages, and        benefits         863     839        2.9   1,699   1,639        3.7       Fuel and oil      726     945      (23.2)  1,423   1,745      (18.5)       Maintenance        materials and        repairs          190     191       (0.5)    373     333       12.0       Aircraft        rentals           47      38       23.7      93      76       22.4       Landing fees        and other        rentals          179     159       12.6     345     330        4.5       Depreciation        and        amortization     150     148        1.4     300     293        2.4       Other        operating        expenses         338     344       (1.7)    666     690       (3.5)                         ---     ---                ---     ---         Total          operating          expenses     2,493   2,664       (6.4)  4,899   5,106       (4.1)                       -----   -----              -----   -----     OPERATING INCOME    123     205      (40.0)     73     293      (75.1)     OTHER EXPENSES      (INCOME):       Interest        expense           47      32       46.9      92      60       53.3       Capitalized        interest          (5)     (6)     (16.7)    (11)    (14)     (21.4)       Interest        income            (3)     (5)     (40.0)     (8)    (12)     (33.3)       Other (gains)        losses, net       34    (345)      n.a.      57    (307)      n.a.                         ---    ----                ---    ----         Total other          expenses          (income)        73    (324)      n.a.     130    (273)      n.a.                         ---    ----                ---    ----     INCOME (LOSS)      BEFORE INCOME      TAXES               50     529      (90.5)    (57)    566     (110.1)     PROVISION      (BENEFIT) FOR      INCOME TAXES        (4)    208     (101.9)    (20)    211     (109.5)                         ---     ---                ---     ---     NET INCOME      (LOSS)             $54    $321      (83.2)   $(37)   $355     (110.4)                         ===    ====               ====    ====     NET INCOME      (LOSS) PER      SHARE:       Basic            $.07    $.44              ($.05)   $.48       Diluted          $.07    $.44              ($.05)   $.48     WEIGHTED AVERAGE      SHARES      OUTSTANDING:       Basic             741     732                741     733       Diluted           741     737                741     736       SOUTHWEST AIRLINES CO.     RECONCILIATION OF REPORTED AMOUNTS TO NON-GAAP ITEMS (SEE NOTE)     (in millions, except per share amounts)     (unaudited)     Note regarding use of non-GAAP financial measures     The financial results provided in this news release "excluding special     items" are non-GAAP results that are provided as supplemental information.     These results should not be relied upon as alternative measures to     Generally Accepted Accounting Principles (GAAP) and primarily reflect     items calculated on an "economic" basis, which contains differences for     specific items recorded as a result of SFAS 133, "Accounting for     Derivative Instruments and Hedging Activities," as amended. Items     calculated on an "economic" basis include only cash settlement gains or     losses for derivative instruments that settled in the current accounting     period, and exclude certain gains or losses associated with derivatives     that settled in a prior period or will settle in a future period.  The     items excluded from economic results primarily include ineffectiveness as     defined, for future period instruments, and changes in market value for     future period derivatives that no longer qualify for special hedge     accounting, as defined in SFAS 133. Management believes it should take     special items into consideration to more accurately measure and monitor     the Company's comparative performance on a consistent basis; therefore,     management wants to provide the transparency to Investors regarding its     views as to a more accurate reflection of the Company's on-going     operations.     The Company's management utilizes both the GAAP and the non-GAAP results     in this news release to evaluate the Company's performance and believes     that comparative analysis of results can be enhanced by excluding the     impact of the unrealized items. In part, since fuel expense is such a     large part of the Company's operating costs and is subject to extreme     volatility, the Company believes it is useful to provide Investors with     the Company's true economic cost of fuel for the periods presented, which     reflects the cash settlements from derivative contracts for the applicable     period.                                Three Months Ended       Six Months Ended                                   June 30,                June 30,                                   --------                --------                                          Percent                  Percent                            2009    2008   Change    2009    2008   Change                            ----    ----   ------    ----    ----   ------     Fuel and oil expense -      unhedged              $607  $1,419           $1,158  $2,511     Less: Fuel hedge      (gains) losses      included in fuel      and oil expense        119    (474)             265    (766)                             ---    ----              ---    ----     Fuel and oil expense      - GAAP                $726    $945    (23.2) $1,423  $1,745    (18.5)     Add/(Deduct): Net      impact from fuel      contracts (1)          (60)    (37)            (140)    (48)                             ---     ---             ----     ---     Fuel and oil expense -      economic              $666    $908    (26.7) $1,283  $1,697    (24.4)                            ----    ----           ------  ------     Operating income, as      reported              $123    $205              $73    $293     Add/(Deduct): Net      impact from fuel      contracts (1)           60      37              140      48                             ---     ---              ---     ---     Operating income,      non-GAAP              $183    $242    (24.4)   $213    $341    (37.5)                            ----    ----             ----    ----     Other (gains) losses,      net, as reported       $34   $(345)             $57   $(307)     Add/(Deduct): Net      impact from fuel      contracts (1)            6     361               16     337                             ---     ---              ---     ---     Other losses, net,      non-GAAP               $40     $16    150.0     $73     $30    143.3                             ---     ---              ---     ---     Net income (loss), as      reported               $54    $321             $(37)   $355     Add/(Deduct): Net      impact from fuel      contracts (1)           54    (324)             124    (289)     Income tax impact      of fuel contracts      (49)    124              (49)    110                             ---     ---              ---     ---                             $59    $121              $38    $176     Add (Deduct):      Change in Illinois      state income tax      law, net                 -       -                -     (12)                             ---     ---              ---     ---     Net income, non-GAAP    $59    $121    (51.2)    $38    $164    (76.8)                             ---    ----              ---    ----     Net income (loss) per      share, diluted, as      reported              $.07    $.44            $(.05)   $.48     Add/(Deduct): Net      impact from fuel      contracts              .01    (.28)             .10    (.24)                             ---    ----              ---    ----                            $.08    $.16             $.05    $.24     Add: Impact of special      items, net               -       -                -    (.02)                             ---     ---              ---    ----     Net income per share,      diluted, non-GAAP     $.08    $.16    (50.0)   $.05    $.22    (77.3)                            ----    ----             ----    ----     (1) See Reconciliation of Impact from Fuel Contracts       SOUTHWEST AIRLINES CO.     RECONCILIATION OF IMPACT FROM FUEL CONTRACTS (SEE PREVIOUS NOTE)     (in millions)     (unaudited)                                                    Three Months  Six Months                                                       Ended        Ended                                                      June 30,     June 30,                                                      --------     --------                                                    2009   2008   2009   2008                                                    ----   ----   ----   ----     Fuel & Oil Expense     ------------------     Add/(Deduct): Impact from current      period settled contracts      included in Other (gains) losses, net          $(2)   $(6)  $(23)   $17     Add/(Deduct): Other impact of fuel      contracts settling in the      current or a prior period                      (58)   (31)  (117)   (65)                                                     ---    ---   ----    ---     Impact from fuel contracts to      Fuel & Oil Expense                            $(60)  $(37) $(140)  $(48)                                                    ----   ----  -----   ----     Operating Income     ----------------     Add/(Deduct): Impact from current      period settled contracts      included in Other (gains) losses, net           $2     $6    $23   $(17)     Add/(Deduct): Other impact of fuel      contracts settling in the      current or a prior period                       58     31    117     65                                                     ---    ---    ---    ---     Impact from fuel contracts to Operating Income  $60    $37   $140    $48                                                     ---    ---   ----    ---     Other (gains) losses     --------------------     Add/(Deduct): Mark-to-market impact      from fuel contracts      settling in future periods                    $(20)  $369   $(18)  $373     Add/(Deduct): Ineffectiveness from fuel hedges      settling in future periods                      24    (14)    11    (19)     Add/(Deduct): Impact from current      period settled contracts      included in Other (gains) losses, net            2      6     23    (17)                                                     ---    ---    ---    ---     Impact from fuel contracts to      Other (gains) losses                            $6   $361    $16   $337                                                     ---   ----    ---   ----     Net Income     ----------     Add/(Deduct): Mark-to-market impact      from fuel contracts      settling in future periods                     $20  $(369)   $18  $(373)     Add/(Deduct): Ineffectiveness from fuel hedges      settling in future periods                     (24)    14    (11)    19     Add/(Deduct): Other impact of fuel      contracts settling in the      current or a prior period                       58     31    117     65                                                     ---    ---    ---    ---     Impact from fuel contracts to      Net Income (loss) *                            $54  $(324)  $124  $(289)                                                     ---  -----   ----  -----     * Excludes income tax impact of unrealized items       SOUTHWEST AIRLINES CO.     COMPARATIVE CONSOLIDATED OPERATING STATISTICS     (unaudited)                  Three months ended               Six months ended                       June 30,                        June 30,                       --------                        --------                   2009        2008      Change     2009      2008     Change                   ----        ----      ------     ----      ----     ------     Revenue      passengers      carried    22,676,171  23,993,342   (5.5)% 42,435,861 45,498,163   (6.7)%     Enplaned      passengers 26,505,438  27,550,957   (3.8)% 49,555,428 52,259,572   (5.2)%     Revenue      passenger      miles      (RPMs)      (000s)     19,683,479  19,811,541   (0.6)% 36,575,108 37,403,700   (2.2)%     Available      seat miles      (ASMs)      (000s)     25,552,927  26,335,085   (3.0)% 49,724,602 51,528,522   (3.5)%     Load factor      77.0%       75.2% 1.8 pts.      73.6%      72.6% 1.0 pts.     Average      length of      passenger      haul (miles)      868         826     5.1%        862        822    4.9%     Average      aircraft      stage length      (miles)           647         636     1.7%        641        632    1.4%     Trips flown    289,573     303,432    (4.6)%   568,708    598,222   (4.9)%     Average      passenger      fare          $110.52     $114.48    (3.5)%   $112.13    $113.42   (1.1)%     Passenger      revenue      yield per      RPM (cents)     12.73       13.86    (8.2)%     13.01      13.80   (5.7)%     Operating      revenue      yield per      ASM (cents)     10.24       10.89    (6.0)%     10.00      10.48   (4.6)%     CASM, GAAP      (cents)          9.76       10.12    (3.6)%      9.85       9.91   (0.6)%     CASM, GAAP      excluding      fuel (cents)     6.91        6.53     5.8%       6.99       6.52    7.2%     CASM,      excluding      special      items      (cents)          9.52        9.98    (4.6)%      9.57       9.82   (2.5)%     CASM,      excluding      fuel and      special      items      (cents)          6.91        6.53     5.8%       6.99       6.52    7.2%     Fuel costs      per gallon,      including      fuel tax      (unhedged)      $1.63       $3.64   (55.2)%     $1.60      $3.29  (51.4)%     Fuel costs      per gallon,      including      fuel tax      (GAAP)          $1.95       $2.42   (19.4)%     $1.97      $2.28  (13.6)%     Fuel costs      per gallon,      including      fuel tax      (economic)      $1.79       $2.32   (22.8)%     $1.77      $2.22  (20.3)%     Fuel      consumed, in      gallons      (millions)        371         388    (4.4)%       721        761   (5.3)%     Fulltime      equivalent      Employees at      period-end *   35,296      34,936     1.0%     35,296     34,936    1.0%     Aircraft in      service at      period-end        543         535     1.5%        543        535    1.5%     CASM (unit costs) - Operating expenses per ASM     RASM (unit revenue) - Operating revenue yield per ASM     * Headcount is defined as "Active" fulltime equivalent Employees for both     periods presented.       SOUTHWEST AIRLINES CO.     CONDENSED CONSOLIDATED BALANCE SHEET     (in millions)     (unaudited)                                         June 30,    December 31,                                           2009          2008                                           ----          ----     ASSETS     Current assets:       Cash and cash equivalents            $946        $1,368       Short-term investments              1,252           435       Accounts and other        receivables                          237           209       Inventories of parts and        supplies, at cost                    200           203       Deferred Income Taxes                 365           365       Prepaid expenses and        other current assets                  94            73                                              --            --         Total current assets              3,094         2,653     Property and equipment, at cost:       Flight equipment                   13,690        13,722       Ground property and        equipment                          1,849         1,769       Deposits on flight        equipment purchase        contracts                            204           380                                             ---           ---                                          15,743        15,871       Less allowance for        depreciation and        amortization                       5,082         4,831                                           -----         -----                                          10,661        11,040     Other assets                            272           375                                             ---           ---                                         $14,027       $14,068                                         =======       =======     LIABILITIES & STOCKHOLDERS' EQUITY     Current liabilities:       Accounts payable                     $732          $668       Accrued liabilities                 1,029         1,012       Air traffic liability               1,207           963       Current maturities of        long-term debt                       105           163                                             ---           ---         Total current          liabilities                      3,073         2,806     Long-term debt less current      maturities                           3,278         3,498     Deferred income taxes                 1,921         1,904     Deferred gains from sale      and leaseback of aircraft              128           105     Other deferred liabilities              481           802     Stockholders' equity:       Common stock                          808           808       Capital in excess of par        value                              1,223         1,215       Retained earnings                   4,863         4,919       Accumulated other        comprehensive loss                  (762)         (984)       Treasury stock, at cost              (986)       (1,005)                                            ----        ------         Total stockholders' equity        5,146         4,953                                           -----         -----                                         $14,027       $14,068                                         =======       =======       SOUTHWEST AIRLINES CO.     CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS     (in millions)     (unaudited)                                              Three months     Six months                                                 ended           ended                                                June 30,        June 30,                                                --------        ---------                                               2009    2008    2009    2008                                               ----    ----    ----    ----     CASH FLOWS FROM OPERATING ACTIVITIES:         Net income (loss)                      $54    $321    $(37)   $355         Adjustments to reconcile net          income (loss) to cash provided by          operating activities:             Depreciation and amortization      150     148     300     293             Unrealized loss (gain) on fuel              derivative instruments             54    (324)    124    (290)             Deferred income taxes               (4)    135     (25)    129             Amortization of deferred              gains on sale and              leaseback of aircraft              (4)     (3)     (7)     (6)             Share-based              compensation expense                3       5       6       9             Excess tax benefits              from share-based              compensation arrangements          (5)      3      (1)      3             Changes in certain assets              and liabilities:               Accounts and other                receivables                      (6)    (97)    (28)   (167)               Other current assets             (28)    (37)    (18)    (50)               Accounts payable and                accrued liabilities             104     286     104     333               Air traffic liability            (43)    105     244     372               Cash collateral received from                (provided to) fuel                 derivative counterparties     (125)  1,865    (185)  2,435               Other, net                       (15)    (71)    (57)   (116)                                                ---     ---     ---     ---                 Net cash provided by                  operating activities          135   2,336     420   3,300     CASH FLOWS FROM INVESTING ACTIVITIES:         Purchases of property and          equipment, net                       (187)   (223)   (272)   (587)         Purchases of short-term investments (1,394) (2,226) (3,090) (3,447)         Proceeds from sales of short-          term investments                    1,203   1,185   2,347   2,645         Other, net                               1       -       1       -                                                ---     ---     ---     ---               Net cash used in                investing activities           (377) (1,264) (1,014) (1,389)     CASH FLOWS FROM FINANCING ACTIVITIES:         Proceeds from sale and          leaseback transactions                208       -     381       -         Issuance of Long-term debt             332     600     332     600         Proceeds from Employee stock plans       4      17       8      27         Payments of long-term debt and          capital lease obligations              (7)     (6)    (41)    (25)         Payment of revolving          credit facility                      (400)      -    (400)      -         Payment of credit line borrowing       (91)      -     (91)      -         Payments of cash dividends              (3)     (3)    (10)    (10)         Repurchase of common stock               -       -       -     (54)         Excess tax benefits          from share-based           compensation arrangements              5      (3)      1      (3)        Other, net                               (5)     (6)     (8)     (6)                                                ---     ---     ---     ---                Net cash provided by                 financing activities            43     599     172     529                                                 --     ---     ---     ---     NET INCREASE (DECREASE) IN CASH      AND CASH EQUIVALENTS                     (199)  1,671    (422)  2,440     CASH AND CASH EQUIVALENTS AT      BEGINNING OF PERIOD                     1,145   2,982   1,368   2,213                                              -----   -----   -----   -----     CASH AND CASH EQUIVALENTS      AT END OF PERIOD                         $946  $4,653    $946  $4,653                                               ====  ======    ====  ======   SOURCE  Southwest Airlines   ... 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Click on the link to read an update from Reuters about the diversion to Charleston, West Virginia on Monday. ... View more

The Passengers onboard Flight #2294 hugged the Pilot after the landing in West Virginia.  Click on the link for the full Associated Press news story. ... View more

If you read this blog or traveled with us last week, you know that we went all out to celebrate Independence Day.  We even had visits from Uncle Sam and Lady Liberty.  Our regular Customers know we LUV to celebrate and that includes big holidays like July Fourth and some “smaller” ones like St. Patrick’s Day.  This is part of our strategy of “Owning the Holidays.” So why are holidays so important to us?  Well, being a holiday airline is part of our DNA and history, and it goes back to when we measured our age in months, not years.  The June 1972 edition of Southwest Airlines Magazine (the forerunner of our current inflight magazine, Spirit) features a photo of our Flight Attendants decorating the cabin for the Easter bunny.  The text explains why holidays were so important to us then, and if you overlook the primary “male” viewpoint of the article (most air travelers in 1971 and 1972 were male businessmen—until we made it affordable for everyone to fly), the reasons are the same today:    A lot of things have changed since those words were written, but it really is reassuring of all the things (including our smiles) that have remained a constant. ... View more