Southwest Airlines Community

Southwest Airlines Co. (NYSE:LUV) (the "Company") today reported its third quarter 2015 results:  Record third quarter net income, excluding special items 1 , of $623 million, or $.94 per diluted share. This represented a $241 million increase from third quarter 2014 and exceeded the Thomson Reuters First Call mean estimate of $.92 per diluted share. Record third quarter GAAP 2 net income of $584 million, or $.88 per diluted share, compared with third quarter 2014 GAAP net income of $329 million. Record quarterly GAAP operating income of $1.2 billion. Excluding special items, record third quarter operating income of $1.0 billion, resulting in an operating margin 3 of 20.3 percent. Returned $549 million to Shareholders through dividends and share repurchases during third quarter 2015, and $1.4 billion during the first nine months of 2015. Return on invested capital, before taxes and excluding special items (ROIC) 1 , for the 12 months ended September 30, 2015, of 31.1 percent, compared with 19.0 percent for the 12 months ended September 30, 2014. Gary C. Kelly, Chairman of the Board, President, and Chief Executive Officer, stated, "We are very pleased to report outstanding third quarter 2015 results marked by a 63.1 percent year-over-year increase in net income, excluding special items. Our record third quarter operating income, excluding special items, of $1.0 billion produced a strong 20.3 percent operating margin, which is a 680 basis point improvement from the year-ago period. The significant margin expansion was driven largely by lower fuel prices. Our results also benefited from a continued focus on cost control and solid overall revenue performance, including a significant contribution from our Rapid Rewards program. Customer demand for our low fares was evident with an all-time quarterly record load factor of 85.4 percent for third quarter 2015. That's what low fares without 'gotcha's', which we call Transfarency SM , will do for you. My thanks to our superb Employees for producing our tenth consecutive quarter of record profits and my congratulations to them on their record $484 million profitsharing accrual, thus far this year. "We are pleased with our third quarter 2015 unit revenue (RASM) performance, considering the longer average stage length, higher average seats per trip (gauge), and softer yield environment. Third quarter 2015 operating revenues grew 10.8 percent to a record $5.3 billion on a year-over-year increase in available seat miles of 7.6 percent. Our third quarter 2015 operating revenues reflected a benefit of approximately $300 million from our July 2015 amended agreement with Chase Bank USA, N.A. (Chase), including a required change in accounting treatment. This benefit includes a one-time non-cash increase to operating revenues of $172 million, which was recorded as a special revenue adjustment. Total operating revenues, excluding this special item 4 , increased 7.2 percent to $5.1 billion, and decreased slightly on a unit basis, both as compared with third quarter 2014. Based on favorable booking and revenue trends thus far in October, and including the ongoing benefit to operating revenues from our amended Chase agreement (estimated to be approximately $130 million for fourth quarter 2015), we are currently expecting an increase to fourth quarter 2015 unit revenue of approximately one percent, year-over-year. "Our favorable third quarter 2015 cost trends and outlook for fourth quarter 2015 costs reflect significantly lower jet fuel prices and ongoing fleet modernization benefits. Our third quarter 2015 economic fuel costs 1 declined nearly $300 million, year-over-year. Based on our existing fuel derivative contracts and market prices as of October 19, 2015, we currently expect full year 2015 economic fuel costs to decline approximately $1.3 billion, year-over-year. "We are very pleased with the strength of our network, especially considering our uncharacteristically high percentage of markets under development. Our new Dallas markets, in particular, continue to perform exceptionally well, including the eight new markets launched in August 2015. We reached an exciting milestone in our international expansion last week with the opening of a new five-gate concourse, along with a Federal Inspection Station for Customs and Border Protection, at Houston's William P. Hobby Airport. We began service between Houston Hobby and San Jose, Costa Rica; Cancun, Mexico City, Puerto Vallarta, and San Jose del Cabo/Los Cabos, Mexico; and our inaugural service to our 96 th city, Belize City, Belize. In addition, we are offering seasonal Saturday service to San Juan, Puerto Rico, and Oranjestad, Aruba. Next month, we will begin service from Houston to Montego Bay, Jamaica, and our inaugural service to Liberia, Costa Rica, subject to foreign government approval. That will bring us to ten nonstop destinations across Latin America and the Caribbean for Southwest Customers out of Houston Hobby. "In addition to producing strong margins and record earnings, our investment grade balance sheet, liquidity, and cash flow remain strong. Our cash and short-term investments were $3.1 billion at the end of third quarter 2015. Thus far this year, we have generated free cash flow 1 of $1.6 billion. We have returned $1.4 billion to Shareholders through the payment of $180 million in dividends and the repurchase of $1.2 billion in common stock so far this year, reflecting our ongoing commitment to enhance long-term value for our Shareholders." Financial Results The Company's third quarter 2015 total operating revenues were a record $5.3 billion, a 10.8 percent increase compared with third quarter 2014, largely driven by third quarter 2015 passenger revenues of $4.7 billion. In addition, as described in more detail below, the Company recorded a special revenue adjustment during third quarter 2015 of $172 million related to its amended agreement with Chase. Other revenues for third quarter 2015 increased 102.1 percent year-over-year, largely due to the amended agreement with Chase and the resulting change in accounting methodology. The Company executed an amended co-branded credit card agreement with Chase during third quarter 2015, through which the Company sells loyalty points and other items to Chase. For accounting purposes, the amended agreement materially modified the previously existing agreement between Chase and the Company and is subject to Accounting Standards Update 2009-13, "Multiple-Deliverable Revenue Arrangements - a consensus of the FASB Emerging Issues Task Force" (ASU 2009-13). Under the transition provisions of ASU 2009-13, the existing deferred revenue liability at the date of the amended agreement was reduced to reflect the estimated selling price of the undelivered element (air transportation) of the contract. As a result, the Company recorded a one-time non-cash adjustment of $172 million that increased revenue, which was classified as a special item and excluded from the Company's third quarter 2015 reported RASM. In addition, the combined impact of the amended agreement and the effect of the resulting change in accounting methodology benefited third quarter 2015 total operating revenues by approximately $130 million, the impact of which was included in third quarter 2015 RASM. This $130 million benefit reflects a $170 million increase to other revenues offset by a $40 million reduction to passenger revenues. An estimated fourth quarter total operating revenue benefit of approximately $130 million is included in the Company's current outlook for a fourth quarter 2015 RASM increase of approximately one percent, year-over-year. Total operating expenses in third quarter 2015 decreased 2.2 percent to $4.1 billion, compared with third quarter 2014. During third quarter 2015, the Company expensed $140 million (before profitsharing expense and taxes) related to the proposed ratification bonuses included in the tentative collective-bargaining agreement recently reached with the Company's Pilots, which is a special item. Excluding special items in both periods, total operating expenses in third quarter 2015 decreased 1.3 percent to $4.1 billion, compared with third quarter 2014. Third quarter 2015 economic fuel costs were $2.20 per gallon, including $.50 per gallon in unfavorable cash settlements from fuel derivative contracts, compared with $2.94 per gallon in third quarter 2014, including $.05 per gallon in favorable cash settlements from fuel derivative contracts. Based on the Company's existing fuel derivative contracts and market prices as of October 19, 2015, fourth quarter 2015 economic fuel costs are estimated to be in the $2.05 to $2.10 per gallon range, as compared with fourth quarter 2014's $2.62 per gallon. As of October 19, 2015, the fair market value of the Company's fuel derivative contracts was a net liability of approximately $1.2 billion for the fuel hedge portfolio through 2018, including a $116 million net liability related to the remainder of 2015. Additional information regarding the Company's fuel derivative contracts is included in the accompanying tables. Excluding fuel and oil expense and special items in both periods, third quarter 2015 operating costs increased 8.4 percent from third quarter 2014, partially due to the third quarter 2015 profitsharing expense of $177 million, compared with $100 million in third quarter 2014. Excluding fuel and oil expense, special items, and profitsharing expense, third quarter 2015 operating costs increased 5.9 percent from third quarter 2014, and decreased 1.6 percent on a unit basis. Based on current trends and excluding fuel and oil expense, special items, and profitsharing expense, the Company currently expects fourth quarter 2015 unit costs to be comparable to fourth quarter 2014. This fourth quarter cost outlook includes the estimated impact of the tentative collective-bargaining agreement recently reached with the Company's Pilots. Operating income in third quarter 2015 was a record $1.2 billion, compared with $614 million in third quarter 2014. Excluding special items, operating income was a third quarter record $1.0 billion in third quarter 2015, compared with $649 million in third quarter 2014. Other expenses in third quarter 2015 were $292 million, compared with $89 million in third quarter 2014. The $203 million increase primarily resulted from $272 million in other losses recognized in third quarter 2015, compared with $66 million in third quarter 2014. In both periods, these losses included ineffectiveness and unrealized mark-to-market amounts associated with a portion of the Company's fuel hedge portfolio, which are special items. Excluding these special items, third quarter 2015 had $33 million in other losses, compared with $16 million in third quarter 2014, primarily attributable to the premium costs associated with the Company's fuel derivative contracts. Fourth quarter 2015 premium costs related to fuel derivative contracts are currently estimated to be in the $40 million to $45 million range, compared with $13 million in fourth quarter 2014. Net interest expense in third quarter 2015 was $20 million, compared with $23 million in third quarter 2014. Third quarter 2015 net income was $584 million, or $.88 per diluted share, which included $39 million (net) of unfavorable special items, compared with third quarter 2014 net income of $329 million, or $.48 per diluted share, which included $53 million (net) of unfavorable special items. Excluding special items, third quarter 2015 net income was $623 million, or $.94 per diluted share, compared with third quarter 2014 net income, excluding special items, of $382 million, or $.55 per diluted share. For the nine months ended September 30, 2015, total operating revenues increased 6.2 percent to $14.8 billion, while total operating expenses decreased 5.0 percent to $11.8 billion, resulting in operating income of $3.1 billion, compared with $1.6 billion for the same period last year. Excluding special items, operating income was $3.0 billion for the nine months ended September 30, 2015, compared with $1.7 billion for the nine months ended September 30, 2014. Net income for the nine months ended September 30, 2015, was $1.6 billion, or $2.45 per diluted share, compared with $946 million, or $1.36 per diluted share, for the same period last year. Excluding special items, net income for the nine months ended September 30, 2015 was $1.8 billion, or $2.63 per diluted share, compared with $993 million, or $1.42 per diluted share, for the same period last year. Balance Sheet and Cash Flows As of September 30, 2015, the Company had approximately $3.1 billion in cash and short-term investments, and a fully available unsecured revolving credit line of $1 billion. Net cash provided by operations during third quarter 2015 was $836 million, capital expenditures were $230 million, and assets constructed for others, net of reimbursements, were $23 million, resulting in free cash flow of $583 million. The Company repaid $79 million in debt and capital lease obligations during third quarter 2015, and intends to repay approximately $40 million in debt and capital lease obligations during the remainder of 2015. The Company funded its ProfitSharing Plan during second quarter 2015 associated with its 2014 results. In past years, the Company's annual profitsharing contribution was funded during third quarter, including $228 million funded in third quarter 2014. During third quarter 2015, the Company returned $549 million to its Shareholders through the payment of $49 million in dividends and the repurchase of $500 million in common stock. Under the existing $1.5 billion share repurchase program, the Company repurchased $500 million in common stock during third quarter 2015 pursuant to an accelerated share repurchase program launched during the quarter (third quarter 2015 ASR program), and received approximately 9.7 million shares, representing an estimated 75 percent of the shares expected to be repurchased. The Company expects to complete the third quarter 2015 ASR program by the end of this month. For the nine months ended September 30, 2015, free cash flow was a strong $1.6 billion which enabled the Company to return $1.4 billion to Shareholders through the payment of $180 million in dividends and the repurchase of $1.2 billion in common stock. The Company has $700 million remaining under its existing $1.5 billion share repurchase program. Fleet and Capacity During third quarter 2015, the Company received three pre-owned Boeing 737-700s to end the quarter with 692 aircraft. The Company continues to manage to approximately 700 aircraft at year-end 2015 and continues to expect to grow its fleet approximately two percent, year-over-year, in 2016. Additional information regarding the Company's aircraft delivery schedule is included in the accompanying tables. The Company's capacity plans remain unchanged with expected available seat mile growth of approximately seven percent this year, and an estimated five to six percent in 2016, both year-over-year. Awards and Recognitions Named one of Best Companies for Work-Life Balance by Forbes Named a Top 50 Employer by Workforce Diversity for Engineering & IT Professionals Magazine Ranked among Best Airline Rewards Programs by U.S. News & World Report Outsmart Magazine's Best Airline Conference Call The Company will discuss its third quarter 2015 results on a conference call at 12:30 p.m. Eastern Time today. A live broadcast of the conference call also will be available at http://southwest.investorroom.com. 1 See Note Regarding Use of Non-GAAP Financial Measures for additional information on special items, ROIC, and free cash flow. In addition, information regarding special items and ROIC is included in the accompanying reconciliation tables. 2 Generally Accepted Accounting Principles in the United States. 3 Operating margin, excluding special items, is calculated as operating income, excluding special items, divided by operating revenues. See Note Regarding Use of Non-GAAP Financial Measures. 4 Additional information regarding the amended agreement with Chase and the resulting change in accounting methodology is included in the Financial Results section of this release. Cautionary Statement Regarding Forward-Looking Statements 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 related to (i) the Company's financial outlook, expectations, and projected results of operations, including specific factors expected to impact the Company's results of operations; (ii) the Company's plans and expectations related to managing risk associated with changing jet fuel prices; (iii) the Company's network plans, goals, opportunities, and expectations, including its plans and expectations with respect to international operations; (iv) the Company's goals with respect to enhancing Shareholder value and returning value to Shareholders; (v) the Company's expectations with respect to liquidity (including its plans for the repayment of debt and capital lease obligations); and (vi) the Company's capacity and fleet plans and expectations. 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) changes in demand for the Company's services and other changes in consumer behavior (including with respect to the Company's co-branded credit card); (ii) the impact of economic conditions, fuel prices, actions of competitors (including without limitation pricing, scheduling, and capacity decisions and consolidation), and other factors beyond the Company's control; (iii) changes in aircraft fuel prices, the impact of hedge accounting, and any changes to the Company's fuel hedging strategies and positions; (iv) the impact of governmental regulations and other governmental actions related to the Company's operations; (v) the Company's dependence on third parties, in particular with respect to its fleet plans; (vi) the Company's ability to timely and effectively implement, transition, and maintain the necessary information technology systems and infrastructure to support its operations and initiatives; and (vii) 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, 2014. Southwest Airlines Co. Condensed Consolidated Statement of Income (in millions, except per share amounts) (unaudited) Three months ended Nine months ended September 30, September 30, 2015 2014 Percent Change 2015 2014 Percent Change OPERATING REVENUES: Passenger $ 4,716 $ 4,564 3.3 $ 13,746 $ 13,249 3.8 Freight 44 45 (2.2) 134 128 4.7 Special revenue adjustment 172 — n.m. 172 —  n.m. Other 386 191 102.1 791 600 31.8      Total operating revenues 5,318 4,800 10.8 14,843 13,977 6.2 OPERATING EXPENSES: Salaries, wages, and benefits 1,699 1,363 24.7 4,725 4,044 16.8 Fuel and oil 936 1,386 (32.5) 2,818 4,125 (31.7) Maintenance materials and repairs 259 248 4.4 729 734 (0.7) Aircraft rentals 60 71 (15.5) 179 227 (21.1) Landing fees and other rentals 303 289 4.8 887 849 4.5 Depreciation and amortization 258 238 8.4 751 687 9.3 Acquisition and integration 6 23 (73.9) 32 78 (59.0) Other operating expenses 572 568 0.7 1,632 1,628 0.2      Total operating expenses 4,093 4,186 (2.2) 11,753 12,372 (5.0) OPERATING INCOME 1,225 614 99.5 3,090 1,605 92.5 OTHER EXPENSES (INCOME): Interest expense 31 31   — 92 97 (5.2) Capitalized interest (9) (6) 50.0 (23) (18) 27.8 Interest income (2) (2) — (5) (5) — Other (gains) losses, net 272 66 312.1 394 16 n.m.      Total other expenses (income) 292 89 228.1 458 90 408.9 INCOME BEFORE INCOME   TAXES 933 525 77.7 2,632 1,515 73.7 PROVISION FOR INCOME   TAXES 349 196 78.1 987 569 73.5 NET INCOME $ 584 $ 329 77.5 $ 1,645 $ 946 73.9 NET INCOME PER SHARE: Basic $ 0.89 $ 0.48 85.4 $ 2.47 $ 1.37 80.3 Diluted $ 0.88 $ 0.48 83.3 $ 2.45 $ 1.36 80.1 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 655 683 (4.1) 665 690 (3.6) Diluted 663 691 (4.1) 673 699 (3.7)   Southwest Airlines Co. Reconciliation of Reported Amounts to Non-GAAP Items (See Note Regarding Use of Non-GAAP Financial Measures) (in millions, except per share amounts)(unaudited) Three months ended Nine months ended September 30, September 30, 2015 2014 Percent Change 2015 2014 Percent Change Operating revenues, as reported $ 5,318 $ 4,800 $ 14,843 $ 13,977 Deduct: Special revenue adjustment (172) — (172) — Operating revenues, Non-GAAP $ 5,146 $ 4,800 7.2 $ 14,671 $ 13,977 5.0 Fuel and oil expense, unhedged $ 843 $ 1,395 $ 2,634 $ 4,171 Add (Deduct): Fuel hedge (gains) losses included in   Fuel and oil expense 93 (9) 184 (46) Fuel and oil expense, as reported $ 936 $ 1,386 $ 2,818 $ 4,125 Add (Deduct): Net impact from fuel contracts (1) 152 (12) 143 (27) Fuel and oil expense, (economic) $ 1,088 $ 1,374 (20.8) $ 2,961 $ 4,098 (27.7) Total operating expenses, as reported $ 4,093 $ 4,186 $ 11,753 $ 12,372 Add (Deduct): Net impact from fuel contracts (1) 152 (12) 143 (27) Deduct: Acquisition and integration costs (6) (23) (32) (78) Add: Litigation settlement — — 37 — Deduct: Labor ratification bonuses (140) — (195) — Total operating expenses, non-GAAP $ 4,099 $ 4,151 (1.3) $ 11,706 $ 12,267 (4.6) Deduct: Fuel and oil expense, non-GAAP (economic) (1,088) (1,374) (2,961) (4,098) Operating expenses, non-GAAP, excluding Fuel   and oil expense $ 3,011 $ 2,777 8.4 $ 8,745 $ 8,169 7.1 Deduct: Profitsharing expense (177) (100) (484) (256) Operating expenses, non-GAAP, excluding   profitsharing and Fuel and oil expense $ 2,834 $ 2,677 5.9 $ 8,261 $ 7,913 4.4 Operating income, as reported $ 1,225 $ 614 $ 3,090 $ 1,605 Add (Deduct): Net impact from fuel contracts (1) (152) 12 (143) 27 Add: Acquisition and integration costs 6 23 32 78 Deduct: Litigation settlement — — (37) — Add: Labor ratification bonuses 140 — 195 — Deduct: Special revenue adjustment (172) — (172) — Operating income, non-GAAP $ 1,047 $ 649 61.3 $ 2,965 $ 1,710 73.4 Other (gains) losses, net, as reported $ 272 $ 66 $ 394 $ 16 Add (Deduct): Net impact from fuel contracts (1) (239) (50) (316) 31 Other (gains) losses, net, non-GAAP $ 33 $ 16 106.3 $ 78 $ 47 66.0 Net income, as reported $ 584 $ 329 $ 1,645 $ 946 Add (Deduct): Net impact from fuel contracts (1) 87 62 173 (4) Add (Deduct): Income tax impact of fuel contracts (32) (23) (65) 2 Add: Acquisition and integration costs (2) 4 14 20 49 Deduct: Litigation settlement (2) — — (23) — Add: Labor ratification bonuses (2) 88 — 122 — Deduct: Special revenue adjustment (2) (108) — (108) — Net income, non-GAAP $ 623 $ 382 63.1 $ 1,764 $ 993 77.6 Net income per share, diluted, as reported $ 0.88 $ 0.48 $ 2.45 $ 1.36 Add (Deduct): Net impact from fuel contracts (2) 0.08 0.05 0.15 (0.01) Add (Deduct): Impact of special items (2) (0.02) 0.02 0.03 0.07 Net income per share, diluted, non-GAAP $ 0.94 $ 0.55 70.9 $ 2.63 $ 1.42 85.2 (1) See Reconciliation of Impact from Fuel Contracts. (2) Amounts net of tax.   Southwest Airlines Co. Reconciliation of Impact from Fuel Contracts (See Note Regarding Use of Non-GAAP Financial Measures) (in millions) (unaudited) Three months ended Nine months ended September 30, September 30, Fuel and oil expense 2015 2014 2015 2014 Reclassification between Fuel and oil and   Other (gains) losses, net, associated with   current period settled contracts $ 61 $ (5) $ 61 $ (5) Contracts settling in the current period, but   for which gains and/or (losses) have been   recognized in a prior period (1) 91 (7) 82 (22) Impact from fuel contracts to Fuel and   oil expense $ 152 $ (12) $ 143 $ (27) Operating Income Reclassification between Fuel and oil and   Other (gains) losses, net, associated with   current period settled contracts $ (61) $ 5 $ (61) $ 5 Contracts settling in the current period, but   for which gains and/or (losses) have been   recognized in a prior period (1) (91) 7 (82) 22 Impact from fuel contracts to Operating   Income $ (152) $ 12 $ (143) $ 27 Other (gains) losses, net Mark-to-market impact from fuel contracts   settling in future periods $ (179) $ (44) $ (271) $ (5) Ineffectiveness from fuel hedges settling in   future periods 1 (11) 16 31 Reclassification between Fuel and oil and   Other (gains) losses, net, associated with   current period settled contracts (61) 5 (61) 5 Impact from fuel contracts to Other   (gains) losses, net $ (239) $ (50) $ (316) $ 31 Net Income Mark-to-market impact from fuel contracts   settling in future periods $ 179 $ 44 $ 271 $ 5 Ineffectiveness from fuel hedges settling in   future periods (1) 11 (16) (31) Other net impact of fuel contracts settling in   the current or a prior period (excluding   reclassifications) (91) 7 (82) 22 Impact from fuel contracts to Net   Income (2) $ 87 $ 62 $ 173 $ (4) (1) As a result of prior hedge ineffectiveness and/or contracts marked-to-market through the income statement. (2) Before income tax impact of unrealized items.   Southwest Airlines Co. Comparative Consolidated Operating Statistics (unaudited) Three months ended Nine months ended September 30, September 30, 2015 2014 Change 2015 2014 Change Revenue passengers carried 30,559,019 28,391,882 7.6% 87,802,757 82,602,805 6.3% Enplaned passengers 37,765,903 35,255,248 7.1% 107,535,145 101,701,969 5.7% Revenue passenger miles (RPMs) (000s) (1) 31,052,660 28,522,164 8.9% 87,771,907 81,267,478 8.0% Available seat miles (ASMs) (000s) (2) 36,360,340 33,785,824 7.6% 105,133,835 98,356,618 6.9% Load factor (3) 85.4% 84.4% 1.0 pts. 83.5% 82.6% 0.9 pts. Average length of passenger haul (miles) 1,016 1,005 1.1% 1,000 984 1.6% Average aircraft stage length (miles) 754 728 3.6% 750 721 4.0% Trips flown 325,301 319,250 1.9% 948,180 946,231 0.2% Seats flown (4) 47,470,059 45,824,276 3.6% 138,326,878 135,033,197 2.4% Seats per trip (5) 145.93 143.54 1.7% 145.89 142.71 2.2% Average passenger fare (11) $ 154.33 $ 160.74 (4.0)% $ 156.55 $ 160.39 (2.4)% Passenger revenue yield per RPM (cents) (6)(11) 15.19 16.00 (5.1)% 15.66 16.30 (3.9)% RASM (cents) (7) 14.15 14.21 (0.4)% 13.95 14.21 (1.8)% PRASM (cents) (8)(11) 12.97 13.51 (4.0)% 13.07 13.47 (3.0)% CASM (cents) (9) 11.26 12.39 (9.1)% 11.18 12.58 (11.1)% CASM, excluding Fuel and oil expense (cents) 8.68 8.29 4.7% 8.50 8.38 1.4% CASM, excluding special items (cents) 11.27 12.29 (8.3)% 11.13 12.47 (10.7)% CASM, excluding Fuel and oil expense and special items (cents) 8.28 8.22 0.7% 8.31 8.30 0.1% CASM, excluding Fuel and oil expense, special items, and   profitsharing expense (cents) 7.79 7.92 (1.6)% 7.85 8.04 (2.4)% Fuel costs per gallon, including fuel tax (unhedged) $ 1.70 $ 2.99 (43.1)% $ 1.85 $ 3.06 (39.5)% Fuel costs per gallon, including fuel tax $ 1.89 $ 2.97 (36.4)% $ 1.98 $ 3.03 (34.7)% Fuel costs per gallon, including fuel tax (economic) $ 2.20 $ 2.94 (25.2)% $ 2.08 $ 3.01 (30.9)% Fuel consumed, in gallons (millions) 493 466 5.8% 1,420 1,357 4.6% Active fulltime equivalent Employees 48,642 45,750 6.3% 48,642 45,750 6.3% Aircraft at end of period (10) 692 685 1.0% 692 685 1.0% (1) A revenue passenger mile is one paying passenger flown one mile. Also referred to as "traffic," which is a measure of demand for a given period. (2) An available seat mile is one seat (empty or full) flown one mile. Also referred to as "capacity," which is a measure of the space available to carry passengers in a given period. (3) Revenue passenger miles divided by available seat miles. (4) Seats flown is calculated using total number of seats available by aircraft type multiplied by the total trips flown by the same aircraft type during a particular period. (5) Seats per trip is calculated using seats flown divided by trips flown. Also referred to as "gauge." (6) Calculated as passenger revenue divided by revenue passenger miles. Also referred to as "yield," this is the average cost paid by a paying passenger to fly one mile, which is a measure of revenue production and fares. (7) RASM (unit revenue) - Operating revenue yield per ASM, calculated as operating revenue, excluding special items, divided by available seat miles. Also referred to as "operating unit revenues," this is a measure of operating revenue production based on the total available seat miles flown during a particular period. Third quarter 2015 RASM excludes a $172 million one-time non-cash special revenue adjustment. Additional information regarding this special item is provided in the Financial Results section of this release and the accompanying reconciliation tables. (8) PRASM (Passenger unit revenue) - Passenger revenue yield per ASM, calculated as passenger revenue divided by available seat miles. Also referred to as "passenger unit revenues," this is a measure of passenger revenue production based on the total available seat miles flown during a particular period. (9) CASM (unit costs) - Operating expenses per ASM, calculated as operating expenses divided by available seat miles. Also referred to as "unit costs" or "cost per available seat mile," this is the average cost to fly an aircraft seat (empty or full) one mile, which is a measure of cost efficiencies. (10) Aircraft in the Company's fleet at period end, less Boeing 717-200s removed from service in preparation for transition out of the fleet. (11) Refer to the Financial Results section of this release for additional information regarding the impact from the amended co-branded credit card agreement with Chase.   Southwest Airlines Co. Return on Invested Capital (ROIC) (See Note Regarding Use of Non-GAAP Financial Measures) (in millions) (unaudited) Twelve Months Ended Twelve Months Ended September 30, 2015 September 30, 2014 Operating income, as reported $ 3,711 $ 1,991 Net impact from fuel contracts (142) 40 Acquisition and integration costs 80 97 Labor ratification bonuses 204 — Special revenue adjustment (172) — Litigation settlement (37) — Operating income, non-GAAP $ 3,644 $ 2,128 Net adjustment for aircraft leases (1) 113 136 Adjustment for fuel hedge premium expense (94) (70) Adjusted Operating income, non-GAAP $ 3,663 $ 2,194 Average invested capital (2) $ 11,011 $ 11,616 Equity adjustment for hedge accounting 761 (61) Adjusted average invested capital $ 11,772 $ 11,555 ROIC, pre-tax 31.1% 19.0% (1) Net adjustment related to presumption that all aircraft in fleet are owned (i.e., the impact of eliminating aircraft rent expense and replacing with estimated depreciation expense for those same aircraft). (2) Average invested capital is an average of the five most recent quarter end balances of debt, net present value of aircraft leases, and equity adjusted for hedge accounting.   Southwest Airlines Co. Condensed Consolidated Balance Sheet (in millions) (unaudited) September 30, 2015 December 31, 2014 ASSETS Current assets:      Cash and cash equivalents $ 1,740 $ 1,282      Short-term investments 1,356 1,706      Accounts and other receivables 465 365      Inventories of parts and supplies, at cost 308 342      Deferred income taxes 465 477      Prepaid expenses and other current assets 239 232           Total current assets 4,573 4,404 Property and equipment, at cost:      Flight equipment 19,244 18,473      Ground property and equipment 3,066 2,853      Deposits on flight equipment purchase contracts 692 566      Assets constructed for others 823 621 23,825 22,513      Less allowance for depreciation and amortization 8,896 8,221 14,929 14,292 Goodwill 970 970 Other assets 687 534 $ 21,159 $ 20,200 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:      Accounts payable $ 1,235 $ 1,203      Accrued liabilities 2,049 1,565      Air traffic liability 3,513 2,897      Current maturities of long-term debt 287 258           Total current liabilities 7,084 5,923 Long-term debt less current maturities 2,381 2,434 Deferred income taxes 3,111 3,259 Construction obligation 684 554 Other noncurrent liabilities 931 1,255 Stockholders' equity:      Common stock 808 808      Capital in excess of par value 1,330 1,315      Retained earnings 8,922 7,416      Accumulated other comprehensive loss (903) (738)      Treasury stock, at cost (3,189) (2,026)           Total stockholders' equity 6,968 6,775 $ 21,159 $ 20,200   Southwest Airlines Co. Condensed Consolidated Statement of Cash Flows (in millions) (unaudited) Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 584 $ 329 $ 1,645 $ 946 Adjustments to reconcile net income to cash provided by (used in)   operating activities: Depreciation and amortization 258 238 751 687 Unrealized/realized (gain) loss on fuel derivative instruments 87 63 172 (4) Deferred income taxes (82) 392 (40) 472 Changes in certain assets and liabilities: Accounts and other receivables 4 (22) (86) (83) Other assets 33 6 40 (7) Accounts payable and accrued liabilities 380 (534) 424 (86) Air traffic liability (301) (108) 617 806 Cash collateral received from (provided to) derivative counterparties 181 (98) (213) 8 Other, net (308) (26) (396) (41) Net cash provided by operating activities 836 240 2,914 2,698 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (230) (406) (1,231) (1,282) Assets constructed for others (32) (27) (76) (58) Purchases of short-term investments (506) (415) (1,383) (2,344) Proceeds from sales of short-term and other investments 509 805 1,732 2,427 Other, net — (1) (9) (2) Net cash used in investing activities (259) (44) (967) (1,259) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Employee stock plans 9 23 30 96 Proceeds from termination of interest rate derivative instruments — — 12 — Reimbursement for assets constructed for others 9 26 14 26 Payments of long-term debt and capital lease obligations (79) (48) (170) (167) Payments of cash dividends (49) (41) (180) (138) Repayment of construction obligation (3) (3) (8) (8) Repurchase of common stock (500) (200) (1,180) (755) Other, net 4 (3) (7) (16) Net cash used in financing activities (609) (246) (1,489) (962) NET CHANGE IN CASH AND CASH EQUIVALENTS (32) (50) 458 477 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,772 1,882 1,282 1,355 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,740 $ 1,832 $ 1,740 $ 1,832   Southwest Airlines Co. Fuel Derivative Contracts As of October 19, 2015 Estimated economic jet fuel price per gallon, including taxes Average Brent Crude Oil price per barrel 4Q 2015 (2) $30 $1.45 - $1.50 $40 $1.75 - $1.80 Current Market (1) $2.05 - $2.10 $60 $2.30 - $2.35 $70 $2.65 - $2.70 Period Average percent of estimated fuel consumption covered by fuel derivative contracts at varying WTI/Brent Crude Oil, Heating Oil, and Gulf Coast Jet Fuel-equivalent price levels Fourth quarter 2015 (3) — 2016 Approx. 35% 2017 Approx. 65% 2018 Approx. 25% (1) Brent crude oil average market price as of October 19, 2015, was approximately $49 per barrel for fourth quarter 2015. (2) The economic fuel price per gallon sensitivities provided assume the relationship between Brent crude oil and refined products based on market prices as of October 19, 2015. (3) The Company is effectively unhedged for the fourth quarter 2015 at current price levels. A majority of the financial impact of the derivative contracts currently held for the quarter is locked-in and is included in the economic jet fuel price simulations above.   Southwest Airlines Co. 737 Delivery Schedule As of September 30, 2015 The Boeing Company The Boeing Company 737 NG 737 MAX -700 Firm Orders -800 Firm Orders Options Additional  -700s -7 Firm Orders -8 Firm Orders Options Total 2015 — 19 — 24 — — — 43 (3) 2016 — 31 — 15 — — — 46 2017 15 — 12 14 — 14 — 55 2018 10 — 12 4 — 13 — 39 2019 — — — — 15 10 — 25 2020 — — — — 14 22 — 36 2021 — — — — 1 33 18 52 2022 — — — — — 30 19 49 2023 — — — — — 24 23 47 2024 — — — — — 24 23 47 2025 — — — — — — 36 36 2026 — — — — — — 36 36 2027 — — — — — — 36 36 25 (1) 50 24 57 30 170 (2) 191 547 (1) The Company has flexibility to substitute 737-800s in lieu of 737-700 firm orders. (2) The Company has flexibility to substitute MAX 7 in lieu of MAX 8 firm orders beginning in 2019. (3) Includes 13 737-800s and 16 737-700s delivered as of September 30, 2015.   NOTE REGARDING USE OF NON-GAAP FINANCIAL MEASURES The Company's unaudited consolidated financial statements are prepared in accordance with GAAP. These GAAP financial statements include (i) unrealized non-cash adjustments and reclassifications, which can be significant, as a result of accounting requirements and elections made under accounting pronouncements relating to derivative instruments and hedging and (ii) other charges the Company believes are not indicative of its ongoing operational performance. As a result, the Company also provides financial information in this release that was not prepared in accordance with GAAP and should not be considered as an alternative to the information prepared in accordance with GAAP. The Company provides supplemental non-GAAP financial information, including results that it refers to as "economic," which the Company's management utilizes to evaluate its ongoing financial performance and the Company believes provides greater transparency to investors as supplemental information to its GAAP results. The Company's economic financial results differ from GAAP results in that they only include the actual cash settlements from fuel hedge contracts–all reflected within Fuel and oil expense in the period of settlement. Thus, Fuel and oil expense on an economic basis reflects the Company's actual net cash outlays for fuel during the applicable period, inclusive of settled fuel derivative contracts. Any net premium costs paid related to option contracts are reflected as a component of Other (gains) losses, net, for both GAAP and non-GAAP (including economic) purposes in the period of contract settlement. The Company believes these economic results provide a better measure of the impact of the Company's fuel hedges on its operating performance and liquidity since they exclude the unrealized, non-cash adjustments and reclassifications that are recorded in GAAP results in accordance with accounting guidance relating to derivative instruments, and they reflect all cash settlements related to fuel derivative contracts within Fuel and oil expense. This enables the Company's management, as well as investors, to consistently assess the Company's operating performance on a year-over-year or quarter-over-quarter basis after considering all efforts in place to manage fuel expense. However, because these measures are not determined in accordance with GAAP, such measures are susceptible to varying calculations and not all companies calculate the measures in the same manner. As a result, the aforementioned measures, as presented, may not be directly comparable to similarly titled measures presented by other companies. Further information on (i) the Company's fuel hedging program, (ii) the requirements of accounting for derivative instruments, and (iii) the causes of hedge ineffectiveness and/or mark-to-market gains or losses from derivative instruments is included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014. In addition to its "economic" financial measures, as defined above, the Company has also provided other non-GAAP financial measures, including results that it refers to as "excluding special items," as a result of items that the Company believes are not indicative of its ongoing operations. These include a one-time special revenue adjustment due to the July 2015 amended co-branded credit card agreement with Chase and the resulting change in accounting methodology, expenses associated with the Company's acquisition and integration of AirTran, a gain resulting from a litigation settlement received in January 2015, and collective bargaining ratification bonuses for certain workgroups. The Company believes that evaluation of its financial performance can be enhanced by a presentation of results that exclude the impact of these items in order to evaluate the results on a comparative basis with results in prior periods that do not include such items and as a basis for evaluating operating results in future periods. As a result of the Company's acquisition of AirTran, which closed on May 2, 2011, the Company has incurred substantial charges associated with integration of the two companies. Given that the AirTran integration process has been effectively completed, the Company does not anticipate significant future integration expenditure requirements, but may incur smaller incremental costs associated primarily with the continuing conversion and sublease of the Boeing 717 fleet throughout 2015. While the Company cannot predict the exact timing or amounts of such charges, it does expect to treat the charges as special items in its future presentation of non-GAAP results. The Company has also provided free cash flow and ROIC, which are non-GAAP financial measures. The Company believes free cash flow is a meaningful measure because it demonstrates the Company's ability to service its debt, pay dividends and make investments to enhance Shareholder value. Although free cash flow is commonly used as a measure of liquidity, definitions of free cash flow may differ; therefore, the Company is providing an explanation of its calculation for free cash flow. For the three months ended September 30, 2015, the Company generated $583 million in free cash flow, calculated as operating cash flows of $836 million less capital expenditures of $230 million less assets constructed for others of $32 million plus reimbursements for assets constructed for others of $9 million. For the nine months ended September 30, 2015, the Company generated $1.6 billion in free cash flow, calculated as operating cash flows of $2.9 billion less capital expenditures of $1.2 billion less assets constructed for others of $76 million plus reimbursements for assets constructed for others of $14 million. The Company believes ROIC is a meaningful measure because it quantifies how well the Company generates operating income relative to the capital it has invested in its business. Although ROIC is commonly used as a measure of capital efficiency, definitions of ROIC may differ; therefore, the Company is providing an explanation of its calculation for ROIC in the accompanying reconciliation tables to the press release (See Return on Invested Capital).   SOURCE Southwest Airlines Co. ... View more

Southwest Airlines Co. (NYSE: LUV) invites you to listen to a live webcast of its third quarter 2015 financial results.  Details are as follows: When:  Thursday, October 22, 2015 at 12:30 PM Eastern Time Who: Gary Kelly, Chairman of the Board, President and Chief Executive Officer Tammy Romo, Executive Vice President and Chief Financial Officer Web Address:  http://southwest.investorroom.com/ To access the live audio webcast, click on the link above, or go to www.southwest.com and click on "Investor Relations" under the "About Southwest" menu at the bottom of the page.  Upon completion of the live webcast, a replay will be available in the Investor Relations Events Calendar at http://southwest.investorroom.com/events, under Past Events.       SOURCE Southwest Airlines Co. ... View more

Southwest Airlines Co. (NYSE: LUV) invites you to listen to a live webcast of its third quarter 2015 financial results.  Details are as follows: When:  Thursday, October 22, 2015 at 12:30 PM Eastern Time Who: Gary Kelly, Chairman of the Board, President and Chief Executive Officer Tammy Romo, Executive Vice President and Chief Financial Officer Web Address:  http://southwest.investorroom.com/ To access the live audio webcast, click on the link above, or go to www.southwest.com and click on "Investor Relations" under the "About Southwest" menu at the bottom of the page.  Upon completion of the live webcast, a replay will be available in the Investor Relations Events Calendar at http://southwest.investorroom.com/events, under Past Events.       SOURCE Southwest Airlines Co. ... View more

Southwest Airlines and the Hispanic Association of Colleges and Universities announce 2015 college student recipients of annual travel award Southwest Airlines (NYSE: LUV) and the Hispanic Association of Colleges and Universities' (HACU) are proud to join the nearly 150 public and private sector organizations who answered the White House Initiative on Educational Excellence for Hispanics' 25th anniversary call to action.  Southwest Airlines and HACU made a commitment to not only continue the ¡Lánzate!/Take Off! travel award, but to increase the positive difference it makes in the lives of students throughout the country. "Southwest Airlines and HACU teamed up 11 years ago to find a solution to the number one barrier keeping Latino students from graduating from college—the inability to stay connected with family while away at school," said Christine Ortega, Southwest's Manager of Community Affairs & Grassroots.   "Through the ¡Lánzate!/Take Off! travel award, Southwest Airlines is able to connect deserving students with what's important in their lives by providing complimentary airfare to travel home and see their families while they're away from home pursuing higher education.  Through this invaluable program, Southwest and HACU have provided travel to more than 800 students and we look forward to continuing this proud tradition in the future." "By offering a program that supports student's higher education goals and travel awards to families who might not otherwise have the opportunity to visit with their college-bound student, Southwest Airlines is making a great contribution to Hispanic success in higher education," said HACU President and CEO Antonio R. Flores. "The Hispanic Association of Colleges and Universities congratulates the student recipients and Southwest Airlines for giving flight to higher education success." In 2015, Southwest Airlines and HACU awarded 101 students with complimentary roundtrip airfare as part of the ¡Lánzate!/Take Off! travel award.  This year, more than 600 students, from freshmen through graduate students, submitted essays displaying their need and desire for travel on Southwest Airlines.  In the application essays, students wrote about their personal experiences and the importance of staying connected with their families while pursuing higher education away from home.  A panel of judges made up of college professors and educational advocates met to determine the award recipients. Recipients were awarded between one and four roundtrip tickets for travel for themselves or a family member.  Southwest awarded 192 tickets this year to encourage students to continue pursuing their dreams in higher education.  To see the full list of winning students, please visit: www.hacu.net Southwest is dedicated to serving the Hispanic community, and the ¡Lánzate!/Take Off! travel award is one of the many ways the airline gives back.  To learn more about Southwest Airlines' efforts in the Hispanic community, please visit www.Southwest.com/hispanicoutreach ABOUT HACU The Hispanic Association of Colleges and Universities (HACU) represents approximately 450 colleges and universities committed to Hispanic higher education success in the U.S., Puerto Rico, Latin America and Spain. HACU is the only national association representing existing and emerging Hispanic-Serving Institutions (HSIs). Information is available at www.hacu.net. ABOUT SOUTHWEST AIRLINES CO. In its 45th year of service, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other air carriers with exemplary Customer Service delivered by more than 47,000 Employees to more than 100 million Customers annually.  Southwest operates more than 3,600 flights a day, serving 95 destinations across the United States and six additional countries.  Southwest service to Belize City, Belize, is scheduled to begin Oct. 15, 2015.  Subject to foreign government approval, service to Liberia, Costa Rica, is scheduled to begin Nov. 1, 2015. Based on the U.S. Department of Transportation's most recent data, Southwest Airlines is the nation's largest carrier in terms of originating domestic passengers boarded. The Company operates the largest fleet of Boeing aircraft in the world, the majority of which are equipped with satellite-based WiFi providing gate-to-gate connectivity while over the United States.  That connectivity enables Customers to use their personal devices to access streaming music provided by Apple Music or to view video on-demand movies and television shows, as well as nearly 20 channels of free, live TV compliments of our valued Partners. Southwest created Transfarency, a philosophy which treats Customers honestly and fairly, and in which low fares actually stay low. Southwest is the only major U.S. airline to offer bags fly free®  to everyone (first and second checked pieces of luggage, size and weight limits apply, some airlines may allow free checked bags on select routes or for qualified circumstances), and there are no change fees, though fare differences might apply. In 2014, the airline proudly unveiled a bold new look:  Heart.  The new aircraft livery, airport experience, and logo, showcase the dedication of Southwest Employees to connect Customers with what's important in their lives. From its first flights on June 18, 1971, Southwest Airlines launched an era of unprecedented affordability in air travel described by the U.S. Department of Transportation as "The Southwest Effect," a lowering of fares and increase in passenger traffic whenever the carrier enters new markets.  With 42 consecutive years of profitability, Southwest is one of the most honored airlines in the world, known for a triple bottom line approach that contributes to the carrier's performance and productivity, the importance of its People and the communities they serve, and an overall commitment to efficiency and the planet. The 2014 Southwest Airlines One Report™ can be found at SouthwestOneReport.com. Book Southwest Airlines' low fares online at Southwest.com or by phone at 800-I-FLY-SWA.   SOURCE Southwest Airlines ... View more

Newly internationalized terminal complex at William P. Hobby Airport adds new concourse with five gates and new Customs and Border Protection facility begins receiving travelers Carrier inaugurates nonstop service from Houston to airports in Mexico, Costa Rica, and Belize City, Belize, Southwest's newest and 96th city served Employees of Southwest Airlines (NYSE: LUV) launched a new international chapter today in a 45-year history of serving Houston by joining with Houston Airport System and the U.S. Department of Homeland Security, to open a new five-gate concourse, Federal Inspection Station for Customs and Border Protection, new concessions for travelers, and begin daily international service for travelers using Houston's William P. Hobby Airport.  Southwest's new nonstop daily service to a total eight international destinations by November charts a new horizon for Houstonians who value world-renowned Customer Service and low fares offered through Southwest.com. At a morning news conference that began just as Southwest Flight 305 to Cancun departed from one of five gates in the airport's new west concourse, Southwest's local Employees and Company Leadership joined many Houstonians who played a role in bringing international service back to William P. Hobby Airport. "Our roots run deepest in Houston, one of our original Southwest cities, where our friendly People offer reliable service at low fares and help make Southwest the airline that now flies more travelers in the U.S. every day than any other carrier 1 ," said Gary Kelly, Chairman, President and CEO.  "It's a fitting place to firmly plant our investment to connect Houstonians and millions of Southwest Customers who will pass through this facility to what's important in their lives across a growing list of international service options." "Houston's already strong connection to the Americas — both culturally and economically — just got even stronger," said Mayor Annise D. Parker. "Houston has a well-earned reputation as a great place to do business, but it also features world-class amenities and an amazing quality of life. This partnership with Southwest will help provide limitless opportunities for businesses, residents, and tourists from the Americas to experience all of that." In 2012, the Houston City Council overwhelmingly approved Southwest Airlines' proposal to expand service across borders from William P. Hobby Airport by building the new international concourse and Federal Inspection Station, thus "freeing Hobby" from domestic-only capability and a historically monopolized market long-burdened by high international airfares.  Southwest broke ground on the new facility on Sept. 30, 2013, and two years later has completed the $156 million project both on time and under budget. Southwest worked diligently throughout the construction to give opportunity to Small Business Enterprise and Minority and Women-owned Business Enterprise (SBE / MWBE), and has exceeded City of Houston SBE / MWBE requirements. "CBP is proud to have worked with Southwest Airlines and the City of Houston to bring international air service to Houston Hobby Airport after a 46-year hiatus," said Commissioner R. Gil Kerlikowske. "CBP is strongly committed to promoting travel and tourism to the United States by improving the international arrivals experience and the opening of this new international terminal, along with our Trusted Traveler Programs and Automated Passport Control are important steps to enhancing travelers' arrival experience." International-themed festivities at the airport throughout the day included a chance for travelers in the terminal to win prizes provided by Southwest Vacations.  Ceremony surrounded departures to the new destinations, including Belize City, Belize, Southwest's 96th and newest city served. Through William P. Hobby Airport, Southwest Airlines today began operating twice daily nonstop service to and from Cancun as well as once daily nonstop options between Houston and Mexico City, Puerto Vallarta, and San Jose del Cabo/Los Cabos, a total of four cities in Mexico.  Nonstop service linking Costa Rica to Houston also began today with a daily flight to and from the nation's capital, San Jose, with additional new service to Liberia in Costa Rica's Guanacaste province, Southwest's 97th city served, scheduled to begin daily operation Nov. 1, 2015, subject to foreign government approval.  That same day, Southwest is scheduled to begin daily nonstop service between Montego Bay, Jamaica, and Houston Hobby. In addition, seasonal service on Saturdays connects Houston nonstop with San Juan, Puerto Rico, and Oranjestad, Aruba, making a total of ten nonstop routes across Latin America and the Caribbean available to Southwest Customers using Hobby Airport.  All the new flights are available for purchase at Southwest.com. 1  As measured by the Department of Transportation O&D Survey for the twelve months ended March 31, 2015 based on originating passengers boarded. ABOUT SOUTHWEST AIRLINES CO. In its 45th year of service, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other air carriers with exemplary Customer Service delivered by more than 47,000 Employees to more than 100 million Customers annually.  Southwest operates more than 3,600 flights a day, serving 96 destinations across the United States and seven additional countries.  Subject to foreign government approval, service to Liberia, Costa Rica, is scheduled to begin Nov. 1, 2015. Based on the U.S. Department of Transportation's most recent data, Southwest Airlines is the nation's largest carrier in terms of originating domestic passengers boarded. The Company operates the largest fleet of Boeing aircraft in the world, the majority of which are equipped with satellite-based WiFi providing gate-to-gate connectivity while over the United States.  That connectivity enables Customers to use their personal devices to access streaming music provided by Apple Music or to view video on-demand movies and television shows, as well as nearly 20 channels of free, live TV compliments of our valued Partners. Southwest created Transfarency™, a philosophy which treats Customers honestly and fairly, and in which low fares actually stay low. Southwest is the only major U.S. airline to offer bags fly free®  to everyone (first and second checked pieces of luggage, size and weight limits apply, some airlines may allow free checked bags on select routes or for qualified circumstances), and there are no change fees, though fare differences might apply. In 2014, the airline proudly unveiled a bold new look:  Heart.  The new aircraft livery, airport experience, and logo, showcase the dedication of Southwest Employees to connect Customers with what's important in their lives. From its first flights on June 18, 1971, Southwest Airlines launched an era of unprecedented affordability in air travel described by the U.S. Department of Transportation as "The Southwest Effect," a lowering of fares and increase in passenger traffic whenever the carrier enters new markets.  With 42 consecutive years of profitability, Southwest is one of the most honored airlines in the world, known for a triple bottom line approach that contributes to the carrier's performance and productivity, the importance of its People and the communities they serve, and an overall commitment to efficiency and the planet. The 2014 Southwest Airlines One Report™ can be found at SouthwestOneReport.com. Book Southwest Airlines' low fares online at Southwest.com or by phone at 800-I-FLY-SWA. About the Houston Airport System: Houston Airports served more than 53 million passengers in 2014. Houston's three airports — George Bush Intercontinental Airport (IAH), William P. Hobby (HOU) and Ellington Airport (EFD) — contribute more than $27.5 billion to the regional economy. IAH and HOU collectively provide nonstop flights to nearly 200 destinations worldwide. For more information, visit fly2houston.com. Get social with Houston Airports by following us on Twitter @IAH and @HobbyAirport. About U.S. Customs and Border Protection: U.S. Customs and Border Protection is the unified border agency within the Department of Homeland Security charged with the management, control and protection of our nation's borders at and between the official ports of entry. CBP is charged with keeping terrorists and terrorist weapons out of the country while enforcing hundreds of U.S. laws.   SOURCE Southwest Airlines ... View more

Southwest Airlines donates money 'fore' Ronald McDonald House Charities, St. Jude Children's Research Hospital, and Children's Medical Center of Dallas This release contains: 7 Photos Southwest Airlines (NYSE: LUV) today announced it will donate $675,000 to children's charities benefiting children in local and international destinations.  At this year's 30th Annual LUV Classic Golf Tournament, the airline added two donation recipients in addition to Ronald McDonald House Charities (RMHC) to include St. Jude Children's Research Hospital and Children's Medical Center of Dallas. Ginger Hardage, Senior Vice President of Culture and Communications at Southwest Airlines, sits on the International Board of Trustees for the Ronald McDonald House Charities, which is based in Chicago. "Southwest Airlines has proudly taken to the golf course every year for 30 years to raise money for children's charities at our Annual LUV Classic Golf Tournament," Hardage said.  "We have given proceeds from the LUV Classic to a Ronald McDonald House in every U.S. city Southwest Airlines serves, and proceeds from this year's tournament will benefit children in four houses in our international destinations.  This provided us a great opportunity to expand the recipients this year to include St. Jude Children's Research Hospital and Children's Medical Center of Dallas.   We're thrilled to expand the reach of the LUV Classic to benefit children and their families beyond our traditional borders." "It takes $80 per day to help keep a family close to a sick child when they are getting treatment and healing," said Gabe Ottolini of Ronald McDonald House Charities.  "Over the last 30 years of the Southwest LUV Classic partnership, Southwest has helped RMHC serve more than 185,000 children and their families—providing more than just a room or roof over their head, they helped RMHC provide warm meals, spaces for children to play together, and a community of support and resources to help them through a very difficult journey." Kern Wildenthal, M.D., Ph.D., president of Children's Medical Center Foundation said, "Funding received through the 2015 LUV Classic will enhance vital Family Support Services programs such as social work, pastoral care, and special therapies like pet therapy, music therapy, clown therapy, art therapy, and other programs that are not covered by insurance, yet are proven to produce superior patient outcomes when combined with exceptional medical care." Bonne Whittaker, regional events liaison at St. Jude Children's Research Hospital shared that, "The funds received at the LUV Classic will be used to support the life-saving research and treatment being done at St. Jude Children's Research Hospital. St. Jude is leading the way the world understands, treats, and defeats childhood cancer and other life-threatening diseases." The LUV Classic was founded in 1985 by Southwest Airlines President Emeritus Colleen Barrett. The event has since grown to be ranked as one of Dallas' top charity golf tournaments by the Dallas Business Journal, donating more than $15 million since its inception, and benefitting a total of 113 Ronald McDonald Houses. See Southwest.com/luvclassic for details. ABOUT SOUTHWEST AIRLINES CO. In its 45th year of service, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other air carriers with exemplary Customer Service delivered by more than 47,000 Employees to more than 100 million Customers annually.  Southwest operates more than 3,600 flights a day, serving 95 destinations across the United States and six additional countries.  Southwest service to Belize City, Belize, is scheduled to begin Oct. 15, 2015.  Subject to foreign government approval, service to Liberia, Costa Rica, is scheduled to begin Nov. 1, 2015. Based on the U.S. Department of Transportation's most recent data, Southwest Airlines is the nation's largest carrier in terms of originating domestic passengers boarded. The Company operates the largest fleet of Boeing aircraft in the world, the majority of which are equipped with satellite-based WiFi providing gate-to-gate connectivity while over the United States.  That connectivity enables Customers to use their personal devices to access streaming music provided by Apple Music or to view video on-demand movies and television shows, as well as nearly 20 channels of free, live TV compliments of our valued Partners. Southwest created Transfarency, a philosophy which treats Customers honestly and fairly, and in which low fares actually stay low. Southwest is the only major U.S. airline to offer bags fly free®  to everyone (first and second checked pieces of luggage, size and weight limits apply, some airlines may allow free checked bags on select routes or for qualified circumstances), and there are no change fees, though fare differences might apply. In 2014, the airline proudly unveiled a bold new look:  Heart.  The new aircraft livery, airport experience, and logo, showcase the dedication of Southwest Employees to connect Customers with what's important in their lives. From its first flights on June 18, 1971, Southwest Airlines launched an era of unprecedented affordability in air travel described by the U.S. Department of Transportation as "The Southwest Effect," a lowering of fares and increase in passenger traffic whenever the carrier enters new markets.  With 42 consecutive years of profitability, Southwest is one of the most honored airlines in the world, known for a triple bottom line approach that contributes to the carrier's performance and productivity, the importance of its People and the communities they serve, and an overall commitment to efficiency and the planet. The 2014 Southwest Airlines One Report™ can be found at SouthwestOneReport.com. Book Southwest Airlines' low fares online at Southwest.com or by phone at 800-I-FLY-SWA.   SOURCE Southwest Airlines ... View more

Southwest Airlines (NYSE: LUV) is launching a three-day domestic and international sale offering extra low fares for winter travel—hurry, this sale won't last long!  Customers may take advantage of low domestic fares starting at $49, $99, $129, and $149 one-way to select destinations today through Thursday, Oct. 15, 2015, 11:59 p.m. in the respective time zone of the originating city. Fares are available for travel on nonstop, domestic flights except Fridays and Sundays from Dec. 2 through Dec. 16, 2015, and Jan. 5 through Feb. 10, 2016 (check fare rules below for restrictions and exclusions). There are no blackout dates. Seats are limited. Travel to/from Florida or Nevada is valid only on Tuesdays and Wednesdays. Travel to/from San Juan, Puerto Rico is valid only Mondays through Thursdays and Dec. 2 through Dec. 10, 2015, and Jan. 19 through Feb. 10, 2016. Customers may also book flights to international destinations with some of Southwest's low international fares starting at $99 one-way to select destinations today through Thursday, Oct. 15, 2015, 11:59 p.m. in the respective time zone of the originating city.  Fares are available for travel on nonstop flights only on Tuesdays and Wednesdays beginning Dec. 2 through Dec. 16, 2015, and Jan. 12 through Feb. 10, 2016 (check fare rules for restrictions and exclusions). Seats are limited. To see the list of available cities, prices, and to take advantage of Southwest's special fares, visit Southwest.com.  Examples of Southwest Airlines' domestic low fares include (see fare rules below): As low as $49 one-way nonstop between Washington (Reagan) and Indianapolis As low as $49 one-way nonstop between Las Vegas and San Francisco As low as $99 one-way nonstop between Dallas (Love Field) and Seattle As low as $99 one-way nonstop between Newark and Chicago (Midway) As low as $129 one-way nonstop between Atlanta and Los Angeles (LAX) As low as $149 one-way nonstop between Washington (Dulles) and San Diego Examples of Southwest Airlines' international low fares include (see fare rules below): As low as $99 one-way nonstop from Austin to Cancun ABOUT SOUTHWEST AIRLINES CO. In its 45th year of service, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other air carriers with exemplary Customer Service delivered by more than 47,000 Employees to more than 100 million Customers annually.  Southwest operates more than 3,600 flights a day, serving 95 destinations across the United States and six additional countries.  Southwest service to Belize City, Belize, is scheduled to begin Oct. 15, 2015.  Subject to foreign government approval, service to Liberia, Costa Rica, is scheduled to begin Nov. 1, 2015. Based on the U.S. Department of Transportation's most recent data, Southwest Airlines is the nation's largest carrier in terms of originating domestic passengers boarded. The Company operates the largest fleet of Boeing aircraft in the world, the majority of which are equipped with satellite-based WiFi providing gate-to-gate connectivity while over the United States.  That connectivity enables Customers to use their personal devices to access streaming music provided by Apple Music or to view video on-demand movies and television shows, as well as nearly 20 channels of free, live TV compliments of our valued Partners. Southwest created Transfarency, a philosophy which treats Customers honestly and fairly, and in which low fares actually stay low. Southwest is the only major U.S. airline to offer bags fly free® to everyone (first and second checked pieces of luggage, size and weight limits apply, some airlines may allow free checked bags on select routes or for qualified circumstances), and there are no change fees, though fare differences might apply. In 2014, the airline proudly unveiled a bold new look: Heart.  The new aircraft livery, airport experience, and logo, showcase the dedication of Southwest Employees to connect Customers with what's important in their lives. From its first flights on June 18, 1971, Southwest Airlines launched an era of unprecedented affordability in air travel described by the U.S. Department of Transportation as "The Southwest Effect," a lowering of fares and increase in passenger traffic whenever the carrier enters new markets.  With 42 consecutive years of profitability, Southwest is one of the most honored airlines in the world, known for a triple bottom line approach that contributes to the carrier's performance and productivity, the importance of its People and the communities they serve, and an overall commitment to efficiency and the planet. The 2014 Southwest Airlines One Report™ can be found at SouthwestOneReport.com. Book Southwest Airlines' low fares online at Southwest.com or by phone at 800-I-FLY-SWA. SOUTHWEST AIRLINES DOMESTIC SALE FARE RULES Purchase Oct. 13-15, 2015, 11:59 p.m. in the respective time zone of the originating city. Travel Dec. 2-16, 2015, and Jan. 5 through Feb. 10, 2016. Travel is not valid on Fridays and Sundays. Travel to/from Florida or Nevada is valid only on Tuesdays and Wednesdays.  Travel to/from San Juan, Puerto Rico is valid Dec. 2 through Dec. 10, 2015, and Jan. 19 through Feb. 10, 2016. Fares are valid on nonstop, domestic service only. Displayed prices include all U.S. and international government taxes and fees. Points bookings do not include September 11th Security Fee of $5.60 per one-way flight. Seats are limited. Fares may vary by destination, flight, and day of week and won't be available on some flights that operate during very busy travel times and holiday periods.  Travel is available for one-way Wanna Get Away® Fares. Fares may be combined with other Southwest Airlines combinable fares. If combining with other fares, the most restrictive fare's rules apply. Sale fares may be available on other days of week, but not guaranteed. Fares are nonrefundable but may be applied toward future travel on Southwest Airlines®, as long as reservations are canceled at least ten minutes prior to the scheduled departure of the flight.  Failure to cancel prior to departure will result in forfeiture of remaining funds on the reservation. Any change in itinerary may result in an increase in fare. Standby travel requires an upgrade to the Anytime Fare®. Fares are subject to change until ticketed. Offer applies to published, scheduled service only. SOUTHWEST AIRLINES INTERNATIONAL SALE FARE RULES Purchase Oct. 13-15, 2015, 11:59 p.m. in the respective time zone of the originating city. Travel Dec. 2-16, 2015, and Jan. 12 through Feb. 10, 2016. Travel is valid only on Tuesdays and Wednesdays. Fares valid on nonstop, international service only. Displayed prices include all U.S. and international government taxes and fees. Points bookings do not include taxes, fees, and other government/airport charges of at least $5.60 per one-way flight. Seats and days are limited. Fares may vary by destination, flight, and day of week and won't be available on some flights that operate during very busy travel times and holiday periods. Travel is available for Wanna Get Away® Fares. Fares may be combined with other Southwest Airlines combinable fares. If combining with other fares, the most restrictive fare's rules apply. Sale fares may be available on other days of the week, but not guaranteed. Fares are nonrefundable but may be applied toward future travel on Southwest Airlines®, as long as reservations are canceled at least ten minutes prior to the scheduled departure of the flight. Failure to cancel prior to departure will result in forfeiture of remaining funds on the reservation. Any change in itinerary may result in an increase in fare. Standby travel requires an upgrade to the Anytime Fare®. Fares are subject to change until ticketed. Offer applies to published, scheduled service only.     SOURCE Southwest Airlines ... View more

Today we are expecting the technical systems that power our Customer Service to perform normally. Teams worked throughout the night in advance of our first departures to ensure the smoothest operation of our originating and later flights. Out of the 3,355 daily flights in our schedule on Sunday, the airline operated with 75 percent ontime performance. The technical issues did result in approximately 836 delayed flights Sunday. Employees worked around issues with primary systems and utilized back-up procedures to get our Customers and their checked luggage to their intended destinations. We have some additional work to do to get bags delivered and some delayed or displaced Customers into open seats today. We have teams working as quickly as possible to accomplish that. The flexibility we extended our traveling Customers on Sunday continues throughout Monday and that will allow those with travel plans scheduled for Sunday or Monday to change their plans at Southwest.com. It's never too early to say thank you and to extend our apologies and we want to share those sentiments both with our hard-working Employees and our loyal and understanding Customers, whom we hope to welcome back for a better experience soon. We'll continue to work individually with our affected Customers to make this right.‎ ... View more

Carrier continues a decades-long honest, fare approach with superior Customer Service Southwest Airlines® premiered its latest advertising campaign today during an exclusive event inside the new international concourse at William P. Hobby airport in Houston. The campaign—called TransfarencySM—includes multiple TV advertisements, print and digital elements, as well as a microsite focused on the industry's competitive landscape. "Transfarency is a unique approach to treating Customers the way they expect and deserve to be treated. Being a low-fare airline is at the heart of our brand, and the foundation of our business model, so we're not going to nickel and dime our customers," said Kevin Krone, Southwest's Vice President and Chief Marketing Officer. "Southwest continues to lead the pack as the only airline that offers low fares and an inclusive approach to travel. Transfarency is not a new chapter for us, but another tone to the bell that we've been ringing for more than 44 years." The initial ad that debuted today will begin airing this evening as the Texas Rangers, who Southwest proudly sponsors, fight to advance in the baseball playoffs. It continues to run Sunday, Oct. 11, in conjunction with existing placements airing during NFL Sunday Football. Working with agency of record, GSD&M, in Austin, Texas, this campaign includes a heavy focus on the Company's low-fare philosophy with no unexpected bag fees, change fees, or hidden fees. The Transfarency campaign features a heavy emphasis on the unique philosophy created by Southwest Airlines. Transfarency is where Customers are treated honestly and fairly, and low fares actually stay low—with no unexpected bag fees, change fees, or hidden fees. The Transfarency philosophy was created by and is practiced exclusively by Southwest Airlines. "Transfarency rose to the top for us," said Marianne Malina, president of GSD&M. "In one word you get the idea; you get the playfulness from it. It has smart humor that Southwest can own, and it elevates the idea beyond just inclusive pricing. It's about transparency and being honest." In addition to the TV advertisements, campaign elements include print and digital components as well as a microsite focused on the industry's competitive landscape. The microsite includes videos and quizzes focused on Southwest's unique philosophy. A "Fee or Fake" quiz provides tips for travelers to avoid pervasive fees from other airlines. The 30-second initial advertisement that debuted today will begin airing Sunday, Oct. 11, during NFL games on NBC, CBS, and FOX NFL programming. It highlights the bold new look one year after its initial launch and verbalizes the airline's low fares and 86 U.S. destinations. The ads will run nationally for 15 weeks. Following the Oct. 11 launch, Southwest is scheduled to release three additional ads in the coming months. The airline also plans to roll out digital extensions on Facebook and Twitter surrounding the new campaign. International Concourse Today's rollout of the new campaign comes as Southwest gets ready to open a new, $156 million international concourse at William P. Hobby Airport in Houston. On Oct. 15, Southwest will begin operating flights to six international destinations across Latin America and the Caribbean. The new era in air travel will provide Southwest's Houston Customers a low-fare choice to reach destinations that have been not been reachable through Hobby airport in decades. ABOUT SOUTHWEST AIRLINES CO. In its 45th year of service, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other air carriers with exemplary Customer Service delivered by more than 47,000 Employees to more than 100 million Customers annually.  Southwest operates more than 3,600 flights a day, serving 95 destinations across the United States and six additional countries.  Southwest service to Belize City, Belize, is scheduled to begin Oct. 15, 2015.  Subject to foreign government approval, service to Liberia, Costa Rica, is scheduled to begin Nov. 1, 2015. Based on the U.S. Department of Transportation's most recent data, Southwest Airlines is the nation's largest carrier in terms of originating domestic passengers boarded. The Company operates the largest fleet of Boeing aircraft in the world, the majority of which are equipped with satellite-based WiFi providing gate-to-gate connectivity while over the United States.  That connectivity enables Customers to use their personal devices to access streaming music provided by Apple Music or to view video on-demand movies and television shows, as well as nearly 20 channels of free, live TV compliments of our valued Partners. Southwest believes in Transfarency, a philosophy created by Southwest Airlines in which Customers are treated honestly and fairly, and low fares actually stay low. *Southwest is the only major U.S. airline to offer bags fly free®  to everyone (first and second checked pieces of luggage, size and weight limits apply, some airlines may allow free checked bags on select routes or for qualified circumstances), and there are no change fees, though fare differences might apply. In 2014, the airline proudly unveiled a bold new look:  Heart.  The new aircraft livery, airport experience, and logo, showcase the dedication of Southwest Employees to connect Customers with what's important in their lives. From its first flights on June 18, 1971, Southwest Airlines launched an era of unprecedented affordability in air travel described by the U.S. Department of Transportation as "The Southwest Effect," a lowering of fares and increase in passenger traffic whenever the carrier enters new markets.  With 42 consecutive years of profitability, Southwest is one of the most honored airlines in the world, known for a triple bottom line approach that contributes to the carrier's performance and productivity, the importance of its People and the communities they serve, and an overall commitment to efficiency and the planet. The 2014 Southwest Airlines One Report™ can be found at SouthwestOneReport.com. Book Southwest Airlines' low fares online at Southwest.com or by phone at 800-I-FLY-SWA.   SOURCE Southwest Airlines ... View more

Forty three years ago, Southwest Airlines launched a low fare revolution. Today, the Southwest Effect is alive and well, as the nation’s leading low fare airline (the low fare policeman) continues to consistently offer the lowest fares in the industry, boost travel, and keep our competitors honest—all while standing alone against hidden fees. INCLUDES: 1 release ... View more

This release contains: 2 Related Documents Downloads: Narrative | Our Low Fare Story: The Southwest Effect is Alive and Well. Presentation | Is the Southwest Effect Still Alive? Presentation | Dallas Love Field: A Great Example   Links: Airline fees we love to hate The Freedom To Fly CHEAP American Airlines combats 'Southwest Effect' — and more earnings takeaways How Wichita shows that the 'Southwest effect' still happens What Airline Is The Cheapest? What Does Your Flight Really Cost? Southwest Airlines Co. Is Planning Disruptive Growth in Dallas and D.C. Will Southwest launch fare war with deep discounts at Dallas Love Field? 'Southwest Effect' at Ford Airport 1 year later ... View more

Southwest Airlines Co. (NYSE: LUV) (the "Company") today reported its September, third quarter, and year-to-date preliminary traffic statistics. The Company flew 9.2 billion revenue passenger miles (RPMs) in September 2015, an 11.4 percent increase from the 8.3 billion RPMs flown in September 2014. Available seat miles (ASMs) increased 8.4 percent to 11.1 billion in September 2015, compared with the September 2014 level of 10.3 billion. The September 2015 load factor was a record for the month of September at 82.7 percent, compared with 80.5 percent in September 2014. For the third quarter of 2015, the Company flew 31.1 billion RPMs, compared with 28.5 billion RPMs flown for the same period in 2014, an increase of 8.9 percent. Third quarter 2015 ASMs increased 7.6 percent to a level of 36.4 billion, compared with third quarter 2014 ASMs of 33.8 billion. The third quarter 2015 load factor was a quarterly record at 85.4 percent, compared with 84.4 percent for the same period in 2014. The Company continues to expect its third quarter 2015 operating revenue per ASM (RASM) to decrease approximately 1.0 percent, compared with third quarter 2014. For the first nine months of 2015, the Company flew 87.8 billion RPMs, compared with 81.3 billion RPMs flown for the same period in 2014, an increase of 8.0 percent. Year-to-date 2015 ASMs increased 6.9 percent to a level of 105.1 billion, compared with 98.4 billion for the same period in 2014. The year-to-date 2015 load factor was 83.5 percent, compared with 82.6 percent for the same period in 2014. This release, as well as past news releases about Southwest Airlines Co., is available online at Southwest.com. Southwest Airlines Co. Preliminary Comparative Traffic Statistics SEPTEMBER 2015 2014 Change Revenue passengers carried 9,421,347 8,638,582 9.1% Enplaned passengers 11,536,417 10,556,294 9.3% Revenue passenger miles (000s) 9,206,955 8,267,245 11.4% Available seat miles (000s) 11,133,628 10,274,379 8.4% Load factor 82.7% 80.5% 2.2 pts. Average length of haul 977 957 2.1% Trips flown 101,467 99,488 2.0% THIRD QUARTER 2015 2014 Change Revenue passengers carried 30,559,019 28,391,882 7.6% Enplaned passengers 37,765,903 35,255,248 7.1% Revenue passenger miles (000s) 31,052,660 28,522,164 8.9% Available seat miles (000s) 36,360,340 33,785,824 7.6% Load factor 85.4% 84.4% 1.0 pts. Average length of haul 1,016 1,005 1.1% Trips flown 325,301 319,250 1.9% YEAR-TO-DATE 2015 2014 Change Revenue passengers carried 87,802,757 82,602,805 6.3% Enplaned passengers 107,535,145 101,701,969 5.7% Revenue passenger miles (000s) 87,771,907 81,267,478 8.0% Available seat miles (000s) 105,133,835 98,356,618 6.9% Load factor 83.5% 82.6% 0.9 pts. Average length of haul 1,000 984 1.6% Trips flown 948,180 946,231 0.2%   SOURCE Southwest Airlines Co. ... View more

This release contains: 1 Related Document, 1 Photo At a meeting today, the Board of Directors of Southwest Airlines (NYSE: LUV) appointed Dr. Thomas W. Gilligan as a member of the Board.  Dr. Gilligan currently serves as the Tad and Dianne Taube Director of the Hoover Institution on War, Revolution and Peace at Stanford University, a position he has held since Sept. 2015.  The Hoover Institution is a public policy research center devoted to the advanced study of economics, politics, history, and political economy as well as international affairs.  For a photo of Dr. Gilligan, visit http://swamedia.com/photos/dr-thomas-w-gilligan.  "Tom is a special person with a brilliant mind and a passion for serving others who will be an invaluable addition to our Board of Directors," said Gary Kelly, Chairman of the Board, President, and Chief Executive Officer for Southwest Airlines.  "Tom brings with him a wealth of knowledge, experience, and leadership in finance, economics, and business administration that will benefit our Board and our Company.  We're thrilled to welcome him onboard."   Prior to his appointment at the Hoover Institution, Dr. Gilligan served as the Dean of the McCombs School of Business at The University of Texas at Austin from 2008 to Aug. 2015, where he also held the Centennial Chair in Business Education Leadership.  Dr. Gilligan has held several key administrative roles at the Marshall School of Business at the University of Southern California (USC) between 1987 and 2008, including interim Dean, the Vice-Dean of Undergraduate Education, director of the Ph.D. program, and the Chair of the Finance and Business Economics Department.  During his tenure at USC, he held visiting appointments at Stanford University (1989-1990 and 1994) and Northwestern University (1995-1996).  From 1984 to 1987, Dr. Gilligan taught Economics at the California Institute of Technology.  Dr. Gilligan was a staff economist at the Council of Economic Advisers in the White House from 1982 to 1983; and he served in the United States Air Force from 1972 to 1976.  Dr. Gilligan also currently serves on the Board of Directors of KB Home.  He received his B.A. in 1979 at the University of Oklahoma and his Ph.D. in Economics at Washington University in 1984.   ABOUT SOUTHWEST AIRLINES CO. In its 45th year of service, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other air carriers with exemplary Customer Service delivered by more than 47,000 Employees to more than 100 million Customers annually.  Southwest operates more than 3,600 flights a day, serving 95 destinations across the United States and six additional countries.  Southwest service to Belize City, Belize, begins Oct. 15, 2015.  Subject to foreign government approval, service to Liberia, Costa Rica, begins Nov. 1, 2015. Based on the U.S. Department of Transportation's most recent data, Southwest Airlines is the nation's largest carrier in terms of originating domestic passengers boarded. The Company operates the largest fleet of Boeing aircraft in the world, the majority of which are equipped with satellite-based WiFi providing gate-to-gate connectivity while over the United States.  That connectivity enables Customers to use their personal devices to access streaming music provided by Apple Music or to view video on-demand movies and television shows, as well as nearly 20 channels of free, live TV compliments of our valued Partners. Southwest is the only major U.S. airline to offer bags fly free®  to everyone (first and second checked pieces of luggage, size and weight limits apply, some airlines may allow free checked bags on select routes or for qualified circumstances), and there are no change fees, though fare differences might apply. In 2014, the airline proudly unveiled a bold new look:  Heart.  The new aircraft livery, airport experience, and logo, showcase the dedication of Southwest Employees to connect Customers with what's important in their lives. From its first flights on June 18, 1971, Southwest Airlines launched an era of unprecedented affordability in air travel described by the U.S. Department of Transportation as "The Southwest Effect," a lowering of fares and increase in passenger traffic whenever the carrier enters new markets.  With 42 consecutive years of profitability, Southwest is one of the most honored airlines in the world, known for a triple bottom line approach that contributes to the carrier's performance and productivity, the importance of its People and the communities they serve, and an overall commitment to efficiency and the planet. The 2014 Southwest Airlines One Report™ can be found at SouthwestOneReport.com. Book Southwest Airlines' low fares online at Southwest.com or by phone at 800-I-FLY-SWA.   SOURCE Southwest Airlines ... View more

Southwest Airlines (NYSE: LUV) today announced a new tentative agreement with the Southwest Airlines Pilots' Association (SWAPA), the Union that represents the Company's Pilots. SWAPA's Board of Directors reviewed an Agreement in Principle that negotiators reached earlier this month and decided to conduct a ratification vote that could end more than three years of negotiations. The Company said the agreement offers wage increases and work-rule changes that will benefit the pilot group and position Southwest to continue its expansion both domestically and internationally. "I am encouraged that the Union's Board of Directors has chosen to put this agreement in front of our Pilots," said Vice President Flight Operations Craig Drew. "Everyone on both sides of the table worked hard to fashion a contract that recognizes and rewards the steadfast professionalism of our Pilots." Union Leaders will communicate with Pilots over the next few weeks to share the details and terms of the agreement. The ratification vote will close November 4.  If Pilots approve the deal, the contract will become amendable April 1, 2019. Southwest employs more than 8,000 Pilots. They operate a growing fleet of 737s and fly roughly 3,600 flights a day to 95 destinations across the United States and six international destinations. ABOUT SOUTHWEST AIRLINES CO. In its 45th year of service, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other air carriers with exemplary Customer Service delivered by more than 47,000 Employees to more than 100 million Customers annually.  Southwest operates more than 3,600 flights a day, serving 95 destinations across the United States and six additional countries.  Southwest service to Belize City, Belize, begins Oct. 15, 2015.  Subject to foreign government approval, service to Liberia, Costa Rica, begins Nov. 1, 2015. Based on the U.S. Department of Transportation's most recent data, Southwest Airlines is the nation's largest carrier in terms of originating domestic passengers boarded. The Company operates the largest fleet of Boeing aircraft in the world, the majority of which are equipped with satellite-based WiFi providing gate-to-gate connectivity while over the United States.  That connectivity enables Customers to use their personal devices to access streaming music provided by Apple Music or to view video on-demand movies and television shows, as well as nearly 20 channels of free, live TV compliments of our valued Partners. *Southwest is the only major U.S. airline to offer bags fly free®  to everyone (first and second checked pieces of luggage, size and weight limits apply, some airlines may allow free checked bags on select routes or for qualified circumstances), and there are no change fees, though fare differences might apply. In 2014, the airline proudly unveiled a bold new look:  Heart.  The new aircraft livery, airport experience, and logo, showcase the dedication of Southwest Employees to connect Customers with what's important in their lives. From its first flights on June 18, 1971, Southwest Airlines launched an era of unprecedented affordability in air travel described by the U.S. Department of Transportation as "The Southwest Effect," a lowering of fares and increase in passenger traffic whenever the carrier enters new markets.  With 42 consecutive years of profitability, Southwest is one of the most honored airlines in the world, known for a triple bottom line approach that contributes to the carrier's performance and productivity, the importance of its People and the communities they serve, and an overall commitment to efficiency and the planet. The 2014 Southwest Airlines One Report™ can be found at SouthwestOneReport.com. Book Southwest Airlines' low fares online at Southwest.com or by phone at 800-I-FLY-SWA.   SOURCE Southwest Airlines ... View more

Southwest Airlines continues its commitment to the Hispanic community through its support of community events all year long Southwest Airlines (NYSE: LUV) celebrates Hispanic Heritage Month and continues its proud tradition of sponsoring nonprofit organizations dedicated to making a positive difference in the Latino community.  "Our Employees and Customers are from diverse cultures and backgrounds," said Ellen Torbert, Southwest Airlines' Vice President of Diversity and Inclusion.  "Southwest is enriched because we value the unique perspectives of our Employees and Customers, and we're proud to continue to be a champion of the Latino community."  To learn more about Southwest Airlines' commitment to the Hispanic community, please visit Southwest.com/vamonos. Southwest Airlines celebrates Hispanic Heritage Month throughout the year: January-December | Smithsonian Institute Latino Center, Young Ambassadors Program and Hispanic Heritage Month Family Day, Washington, D.C. The Smithsonian Latino Center was created in 1997 to promote Latino presence within the Smithsonian. The Center works collaboratively with the Institution's museums and research centers, ensuring that the contributions of the Latino community in the arts, history, national culture, and scientific achievement are explored, presented, celebrated, and preserved. February-November | Congressional Hispanic Caucus Institute (CHCI), Congressional Internship Program, Washington, D.C. Southwest Airlines was the official airline for the CHCI Internship Program, which brought 78 interns from across the nation to Washington, D.C., for an eight or 12-week internship on Capitol Hill. March | Hispanas Organized for Political Equality (HOPE), HOPE Youth Leadership Program, Los Angeles Southwest Airlines sponsored the HOPE Youth Leadership Program, a program dedicated to serving 300 low-income, first generation, high school-age Latinas for a self-sufficient future that will allow for economic and political parity through a college education. March | MANA de San Diego, Hermanitas Mentorship Program's Avanzamos Conference, San Diego Southwest Airlines helped MANA de San Diego congregate more than 60 7 th -12 th  grade Latinas to explore STEM workshops including bioengineering, planetary science, and chemistry. March | TELACU Education Foundation, College Success Program Leadership Retreat, Lake Arrowhead, CA This life-changing retreat enhances first-generation Latino students' team building and communication skills; promotes bonding with their peers and community engagement; and develops their self-respect, self-esteem, self-discovery, and confidence in a way that cannot be achieved through classroom-style workshops or sessions. March-November | Latino Leaders Network, Latino Leaders Luncheon Series, Chicago, Los Angeles, and Washington, D.C. The Latino Leaders Luncheon Series consists of quarterly events that provide a platform for prominent Latino leaders to share their personal stories of overcoming obstacles to achieve success. April | Hispanics in Philanthropy (HIP) Annual Membership Meeting: Art, Identity, and the Changing Narrative about Latinos, San Francisco Southwest Airlines sponsored HIP's mission to strengthen Latino communities by increasing resources for the Latino and Latin American civil sector; increasing Latino participation and leadership throughout the field of philanthropy; and fostering policy change to enhance equity and inclusiveness. April | Valle del Sol, Golf Fore Kids, Phoenix Southwest Airlines is the official airline of Valle del Sol. The organization inspires positive change by investing in health and human services to strengthen families with tools and skills for self-sufficiency and by building the next generation of Latino and diverse leaders. April | Conexion Americas, A Cup of Coffee for Conexion Americas, Nashville Southwest Airlines sponsored A Cup of Coffee for Conexion Americas, or el cafecito, Conexion Americas' annual fundraising breakfast, which showcases program participants and their successes. April | Hispanic Chamber of Commerce of Greater Kansas City, Comida, Kansas City Southwest Airlines was a sponsor of Comida, the 2nd Annual Latin Culinary Arts Experience. Proceeds benefitted the Hispanic Chamber of Commerce of Greater Kansas City and the Greater Kansas City Hispanic Collaborative. April | South Florida Hispanic Chamber of Commerce (SFLHCC), Education Enhancement Program, Miami SFLHCC promotes the continued growth and development of the Hispanic business community and serves as a resource center and forum to advocate for Hispanic and minority-owned businesses.  Southwest is the exclusive sponsor of the SFLHCC Education Program. April-November |The Mexican American Legal Defense & Educational Fund (MALDEF), 2015 National Awards Galas, Washington, D.C., Chicago, San Antonio, and Los Angeles Southwest Airlines is the official national airline sponsor of MALDEF's 2015 National Awards Galas, where MALDEF honors individuals whose work has been instrumental in addressing the issues and meeting the needs of the Latino community in the United States.  May | Mi Casa Resource Center, Women's Empowerment Luncheon, Denver Southwest Airlines sponsored the Women's Empowerment Luncheon.  The luncheon highlighted inspirational stories, networking and an introduction to the important work Mi Casa Resource Center does to empower women. May | Arizona Hispanic Chamber of Commerce (AZHCC), Annual Black & White Ball, Phoenix The AZHCC serves as the primary advocate for Latino-owned businesses statewide by offering seminars, workshops, marketing and networking events, as well as a variety of well-established, high-profile sponsorship opportunities for our corporate and community partners. May | Hispanic Metro Chamber of Portland Latino Scholarship Program, Portland The Hispanic Metropolitan Chamber works with all members of the community to increase the economic advancement of Latinos in Oregon and southwest Washington. May | Barrio Logan College Institute (BLCI), "Opportunity for Impact", San Diego Southwest Airlines was a sponsor of the annual "Opportunity for Impact" event, which raises funds for BLCI's after school college-prep programs that begin in third grade and continue through college completion. BLCI provides low-income, under-represented, and first-generation college-bound students a wide array of support services and resources including academic tutoring, college preparation, career exploration, renewable scholarships, parental support, mentors, field trips, and workshops. Annually, 100 percent of BLCI's high school graduates enroll in colleges/universities nationwide. Summer | Chicano Latino Youth Leadership Project (CLYLP), California Southwest Airlines is a sponsor of the Chicano Latino Youth Leadership Project, which enhances and builds the leadership potential of California's Chicano/Latino youth to build communities and create a stronger, more prosperous state and nation. Southwest supports CLYLP's four annual conferences; Sacramento Leadership Conference, Los Angeles Institute, San Joaquin Valley Institute, and the Bay Area Institute. August | Hispanic Chamber of Commerce of Metro Denver, Sabor, Denver Southwest Airlines was a supporter of the 2015 Sabor event.  Sabor is known as the largest Hispanic business event in Metro Denver. Funding raised from Sabor will go directly to creating jobs for Hispanics, creating business opportunities for Hispanic businesses, and creating a thriving economic environment for companies who do business in the Hispanic market. August | Celebrando Latinas Conference, San Diego Southwest Airlines is the official airline sponsor for Celebrando.  The conference is a day to empower and educate over 1,100 Latinas in health, business and technology.  September | Southwest Airlines, The Power of Inclusion: My Journey, Dallas Southwest Airlines hosted its Power of Inclusion Event in honor of Hispanic Heritage Month.  This year's event focused on highlighting the story of Deborah Acosta Conder, Deputy Director of External Relations, NASA Johnson Space Center.  Employees joined at the Company's headquarters to celebrate and learn together. Sept. 17 | Hispanic Heritage Foundation, 28th Annual Hispanic Heritage Awards, Washington, D.C. Southwest Airlines is the official airline of Hispanic Heritage Foundation and supports its annual Hispanic Heritage Awards. The Hispanic Heritage Awards were established by The White House in 1987 to commemorate the creation of Hispanic Heritage Month in America. The Hispanic Heritage Awards are considered among the "highest honor for Latinos by Latinos" and recognize notable Latinos who have made a positive impact on America, and the world, in various fields. Sept. 18-19 | National Association of Latino Elected and Appointed Officials (NALEO), 11 th  Annual National Summit on the State of Latino Education: Developing a Latino College Completion Policy Agenda, Washington, D.C. The NALEO 11 th  Annual National Summit on the State of Latino Education is a two-day professional development opportunity aimed at enhancing Latino policymakers' knowledge of the most pressing and timely policy issues in the field of postsecondary education.   Oct. 17 | Tucson Hispanic Chamber of Commerce (THCC), Annual Noche de Exitos Gala, Tucson Southwest Airlines is a member and supporter of the Tucson Hispanic Chamber of Commerce.  The THCC is recognized as the largest Latino organization in Arizona, with more than 1,100 member businesses representing tens of thousands of employees. Oct. 22 | National Puerto Rican Leadership Council Education Fund (NPRLC), Annual Summit, Orlando The National Puerto Rican Leadership Council Education Fund is a Florida nonprofit corporation created to help pass the "leadership torch" to future generations.  They inspire youth through unbiased education and exemplary leadership.  Southwest Airlines is the primary sponsor of the annual summit. Oct. 22 | Chicanos Por La Causa (CPLC), 17 th Annual Esperanza Latino Teacher Awards, Phoenix Southwest Airlines is the official airline of CPLC in both Phoenix and Tucson, the only community development corporation in Arizona that offers extensive services in both urban and rural areas. The extensive programs cover economic development, education, community development (housing), and social services. Nov. 6 | National Museum of Mexican Art, Dia de los Muertos Ball: Love Never Dies, Chicago Southwest Airlines is the official airline of this cultural gem, dedicated to showcasing the incredible artistic talent of Mexican and Mexican-American artists. Nov. 7 | Puerto Rican Arts Alliance, National Cuatro Fest, Chicago Southwest Airlines is the official airline of this cultural institution dedicated to preserving Puerto Rican arts and culture. The National Cuatro Festival celebrates the music of their national instrument. ABOUT SOUTHWEST AIRLINES CO. In its 45th year of service, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other air carriers with exemplary Customer Service delivered by more than 47,000 Employees to more than 100 million Customers annually.  Southwest operates more than 3,600 flights a day, serving 95 destinations across the United States and six additional countries.  Southwest service to Belize City, Belize, begins Oct. 15, 2015.  Subject to foreign government approval, service to Liberia, Costa Rica, begins Nov. 1, 2015. Based on the U.S. Department of Transportation's most recent data, Southwest Airlines is the nation's largest carrier in terms of originating domestic passengers boarded. The Company operates the largest fleet of Boeing aircraft in the world, the majority of which are equipped with satellite-based WiFi providing gate-to-gate connectivity while over the United States.  That connectivity enables Customers to use their personal devices to access streaming music provided by Apple Music or to view video on-demand movies and television shows, as well as nearly 20 channels of free, live TV compliments of our valued Partners. Southwest is the only major U.S. airline to offer bags fly free®  to everyone (first and second checked pieces of luggage, size and weight limits apply, some airlines may allow free checked bags on select routes or for qualified circumstances), and there are no change fees, though fare differences might apply. In 2014, the airline proudly unveiled a bold new look:  Heart.  The new aircraft livery, airport experience, and logo, showcase the dedication of Southwest Employees to connect Customers with what's important in their lives. From its first flights on June 18, 1971, Southwest Airlines launched an era of unprecedented affordability in air travel described by the U.S. Department of Transportation as "The Southwest Effect," a lowering of fares and increase in passenger traffic whenever the carrier enters new markets.  With 42 consecutive years of profitability, Southwest is one of the most honored airlines in the world, known for a triple bottom line approach that contributes to the carrier's performance and productivity, the importance of its People and the communities they serve, and an overall commitment to efficiency and the planet. The 2014 Southwest Airlines One Report™ can be found at SouthwestOneReport.com. Book Southwest Airlines' low fares online at Southwest.com or by phone at 800-I-FLY-SWA.   SOURCE Southwest Airlines ... View more

Southwest Airlines Co. (NYSE: LUV) has been invited to speak at the Morgan Stanley 3rd Annual Laguna Conference.  Morgan Stanley will be webcasting the audio presentation live, and a link to the webcast will be made available via the Investor Relations homepage on the Southwest Airlines website.  Details of the audio webcast are as follows: Date: Friday, September 18, 2015 Time: 8:45 a.m. Pacific Time Speaker: Tammy Romo, Executive Vice President and Chief Financial Officer Web Address: http://southwest.investorroom.com/ To access the live audio webcast, click on the link above, or go to www.southwest.com and click on "Investor Relations" under the "About Southwest" menu at the bottom of the page.  Upon completion of the live webcast, a replay will be available in the Investor Relations Events Calendar at http://southwest.investorroom.com/events, under Past Events. Minimum Requirements to listen to broadcast: Windows Media Player software, downloadable free from http://www.microsoft.com, and at least a 56K bps connection to the Internet.  If you experience problems listening to the webcast, click on Help in the webcast browser.   SOURCE Southwest Airlines ... View more

Southwest Airlines Co. (NYSE: LUV) has been invited to speak at the Morgan Stanley 3rd Annual Laguna Conference. Morgan Stanley will be webcasting the audio presentation live, and a link to the webcast will be made available via the Investor Relations homepage on the Southwest Airlines website. Details of the audio webcast are as follows: Date: Friday, September 18, 2015 Time: 8:45 a.m. Pacific Time Speaker: Tammy Romo, Executive Vice President and Chief Financial Officer Web Address: http://southwest.investorroom.com/ To access the live audio webcast, click on the link above, or go to www.southwest.com and click on "Investor Relations" under the "About Southwest" menu at the bottom of the page.  Upon completion of the live webcast, a replay will be available in the Investor Relations Events Calendar at http://southwest.investorroom.com/events, under Past Events. Minimum Requirements to listen to broadcast: Windows Media Player software, downloadable free from http://www.microsoft.com, and at least a 56K bps connection to the Internet.  If you experience problems listening to the webcast, click on Help in the webcast browser.   SOURCE Southwest Airlines ... View more

Southwest Airlines Co. (NYSE: LUV) (the "Company") today reported its August and year-to-date preliminary traffic statistics. The Company flew 10.3 billion revenue passenger miles (RPMs) in August 2015, a 7.5 percent increase from 9.6 billion RPMs flown in August 2014. Available seat miles (ASMs) increased 7.6 percent to 12.1 billion in August 2015, compared with the August 2014 level of 11.3 billion. The August 2015 load factor was 85.4 percent, compared with 85.5 percent in August 2014. Based on results thus far in third quarter 2015 and current trends, the Company continues to estimate its third quarter 2015 operating revenue per ASM (RASM) will decrease approximately 1.0 percent, compared with third quarter 2014. For the first eight months of 2015, the Company flew 78.6 billion RPMs, compared with 73.0 billion RPMs flown for the same period in 2014, an increase of 7.6 percent. Year-to-date ASMs increased 6.7 percent to a level of 94.0 billion, compared with 88.1 billion for the same period in 2014. The year-to-date load factor was 83.6 percent, compared with 82.9 percent for the same period in 2014. This release, as well as past news releases about Southwest Airlines Co., is available online at Southwest.com. Cautionary Statement Regarding Forward-Looking Statements 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 related to the Company's financial outlook and projected results of operations. 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) changes in demand for the Company's services and other changes in consumer behavior; (ii) the impact of economic conditions, fuel prices, actions of competitors (including without limitation pricing, scheduling, and capacity decisions and consolidation and alliance activities), and other factors beyond the Company's control, on the Company's business decisions, plans, and strategies; (iii) changes in fuel prices; (iv) the Company's ability to timely and effectively implement, transition, and maintain the necessary information technology systems and infrastructure to support its operations and initiatives; (v) the impact of governmental regulations and other governmental actions related to the Company's operations; 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, 2014. Southwest Airlines Co. Preliminary Comparative Traffic Statistics AUGUST 2015 2014 Change Revenue passengers carried 10,095,376 9,442,224 6.9% Enplaned passengers 12,600,993 11,890,205 6.0% Revenue passenger miles (000s) 10,342,510 9,622,324 7.5% Available seat miles (000s) 12,105,854 11,252,402 7.6% Load factor 85.4% 85.5% (0.1) pts. Average length of haul 1,024 1,019 0.5% Trips flown 108,817 106,663 2.0%   YEAR-TO-DATE 2015 2014 Change Revenue passengers carried 78,381,410 73,964,223 6.0% Enplaned passengers 95,998,728 91,145,675 5.3% Revenue passenger miles (000s) 78,564,952 73,000,233 7.6% Available seat miles (000s) 94,000,207 88,082,240 6.7% Load factor 83.6% 82.9% 0.7 pts. Average length of haul 1,002 987 1.5% Trips flown 846,713 846,743 —%   SOURCE Southwest Airlines Co. ... View more

This release contains: 1 Related Document Southwest Airlines (NYSE: LUV) today announced that it has reached an Agreement in Principle on a new contract for the airline's 8,000-plus pilots. The agreement now heads to the Southwest Airlines Pilots' Association (SWAPA) Board of Directors which will decide whether to submit it to pilots for a vote. The Company did not disclose the terms of the agreement. "The process is far from complete, but we are pleased to have reached this milestone," said Vice President Flight Operations Craig Drew. "Our objective is to recognize our pilots with a rewarding contract, and I believe this agreement does that." Members of SWAPA's Board of Directors are meeting later this month to evaluate the terms of the agreement. If they endorse the deal, a tentative agreement will be presented to pilots for a vote. ABOUT SOUTHWEST AIRLINES CO. In its 45th year of service, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other air carriers with exemplary Customer Service delivered by more than 47,000 Employees to more than 100 million Customers annually.  Southwest operates more than 3,600 flights a day, serving 95 destinations across the United States and six additional countries.  Southwest service to Belize City, Belize, begins Oct. 15, 2015. Subject to foreign government approval, service to Liberia, Costa Rica, begins Nov. 1, 2015. Based on the U.S. Department of Transportation's most recent data, Southwest Airlines is the nation's largest carrier in terms of originating domestic passengers boarded. The Company operates the largest fleet of Boeing aircraft in the world, the majority of which are equipped with satellite-based WiFi providing gate-to-gate connectivity while over the United States.  That connectivity enables Customers to use their personal devices to access streaming music provided by Apple Music or to view video on-demand movies and television shows, as well as nearly 20 channels of free, live TV compliments of our valued Partners. *Southwest is the only major U.S. airline to offer bags fly free®  to everyone (first and second checked pieces of luggage, size and weight limits apply, some airlines may allow free checked bags on select routes or for qualified circumstances), and there are no change fees, though fare differences might apply. In 2014, the airline proudly unveiled a bold new look:  Heart.  The new aircraft livery, airport experience, and logo, showcase the dedication of Southwest Employees to connect Customers with what's important in their lives. From its first flights on June 18, 1971, Southwest Airlines launched an era of unprecedented affordability in air travel described by the U.S. Department of Transportation as "The Southwest Effect," a lowering of fares and increase in passenger traffic whenever the carrier enters new markets.  With 42 consecutive years of profitability, Southwest is one of the most honored airlines in the world, known for a triple bottom line approach that contributes to the carrier's performance and productivity, the importance of its People and the communities they serve, and an overall commitment to efficiency and the planet. The 2014 Southwest Airlines One Report™ can be found at SouthwestOneReport.com. Book Southwest Airlines' low fares online at Southwest.com or by phone at 800-I-FLY-SWA. #  #  # ... View more

Golf Pro shares five tips for playing better golf This release contains: 1 Related Document, 5 Photos, 1 Video Southwest Airlines (NYSE: LUV) Rapid Rewards® Visa Signature Cardmembers experienced an exclusive golf getaway at Pebble Beach Resorts® in California featuring a private golf clinic with professional golfer Peter Jacobsen. This was the sixth annual Rapid Rewards event at Pebble Beach and second featuring Peter Jacobsen who shared five tips for playing better golf. "When our Rapid Rewards ®  Cardmembers attend our Rapid Rewards ® Access Events, it truly is an opportunity of a lifetime," said Jonathan Clarkson, director, Rapid Rewards and Partnership Development for Southwest Airlines. "Cardmembers can get so much out of our Access Events including one-on-one time with legendary golfers like Peter Jacobsen. These events offer exclusive access to VIP experiences in addition to the Rapid Rewards ®  program's great value of unlimited reward seats, no blackout dates, and points that don't expire." Benefits apply to point's transactions and points don't expire as long as you have flight or Partner-earning activity every 24 months. "We are thrilled to provide access to events like this to our Cardmembers," said Naney Pandit, general manager, Chase Card Services. "Through the Southwest Rapid Rewards ® program we are able to offer opportunities for Cardmembers to easily turn earned rewards from everyday purchases into exciting experiences throughout the year."  Rapid Rewards Access Events are not the only perks of being a Rapid Rewards® Cardmember. The points earned can be redeemed towards gift cards, merchandise, booking flights, hotels, and car rentals. Additional events Cardmembers can still enjoy in 2015 include a Winemaker Dinner in Houston, Tex., a Nonstop Love Concert Series in Dallas, Tex., Live In The Vineyard in Napa, CA, and a Luxury Beach and Golf Getaway in Cancun, Mex. To see a video of Peter Jacobsen sharing five golf tips at Pebble Beach Golf Academy click here. ABOUT RAPID REWARDS Originally launched in 1987, Rapid Rewards Members earn points by flying or through qualifying purchases with our partners. Members can redeem their points for every seat, every day, on every flight with absolutely no blackout dates or seat restrictions, and points won't expire with any earning activity in a 24-month time period. Points are earned for every dollar spent on Southwest flights. The amount of points earned is based on the fare and fare product purchased, and number of Rapid Rewards Points that are needed to redeem for flights varies based on destination, time, day of travel, demand, fare class, point redemption rate, and other factors. Rapid Rewards Points are also earned by spending with a variety of Rapid Rewards Partners. Rapid Rewards Credit Cardmembers can redeem their points for expanded international travel, gift cards, hotels, car rentals, merchandise, and more. Learn more about the program by visiting the Rapid Rewards web site. ABOUT SOUTHWEST AIRLINES CO. In its 45th year of service, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other air carriers with exemplary Customer Service delivered by more than 47,000 Employees to more than 100 million Customers annually.  Southwest operates more than 3,600 flights a day, serving 95 destinations across the United States and six additional countries.  Southwest service to Belize City, Belize, begins Oct. 15, 2015.  Subject to foreign government approval, service to Liberia, Costa Rica, begins Nov. 1, 2015. Based on the U.S. Department of Transportation's most recent data, Southwest Airlines is the nation's largest carrier in terms of originating domestic passengers boarded. The Company operates the largest fleet of Boeing aircraft in the world, the majority of which are equipped with satellite-based WiFi providing gate-to-gate connectivity while over the United States.  That connectivity enables Customers to use their personal devices to access streaming music provided by Apple Music or to view video on-demand movies and television shows, as well as nearly 20 channels of free, live TV compliments of our valued Partners. Southwest is the only major U.S. airline to offer bags fly free®  to everyone (first and second checked pieces of luggage, size and weight limits apply, some airlines may allow free checked bags on select routes or for qualified circumstances), and there are no change fees, though fare differences might apply. In 2014, the airline proudly unveiled a bold new look:  Heart.  The new aircraft livery, airport experience, and logo, showcase the dedication of Southwest Employees to connect Customers with what's important in their lives. From its first flights on June 18, 1971, Southwest Airlines launched an era of unprecedented affordability in air travel described by the U.S. Department of Transportation as "The Southwest Effect," a lowering of fares and increase in passenger traffic whenever the carrier enters new markets.  With 42 consecutive years of profitability, Southwest is one of the most honored airlines in the world, known for a triple bottom line approach that contributes to the carrier's performance and productivity, the importance of its People and the communities they serve, and an overall commitment to efficiency and the planet. The 2014 Southwest Airlines One Report™ can be found at SouthwestOneReport.com. Book Southwest Airlines' low fares online at Southwest.com or by phone at 800-I-FLY-SWA.   SOURCE Southwest Airlines ... View more

This release contains: 4 Photos, 1 Video It only takes a moment for a simple act of kindness to become something greater. Meet Hudson. Hudson is a happy and energetic 5-year-old little boy who loves spending time with his Poppa, my dad. Watching the airplanes land and take off at our local airport in Albuquerque (ABQ) is one of their favorite shared activities. On this warm July evening, Hudson was enjoying watching the airplanes through the fence and was excitedly pointing out which ones were his "favorites." When my dad joined Hudson at the fence, a Southwest Airlines plane was pulling back from the gate. Hudson was so excited to see the plane passing before us and began to wave wildly through the fence. Much to our surprise, the Pilot pulled back the window and waved back to Hudson. The squeals of laughter and excitement that were shared by both my son and my father were pure joy. That moment when the Pilot waved ignited this sweet explosion of great happiness not only for my son but also for my dad. Just a moment is all it takes for the spark. It was a firecracker moment. To the kind Pilot, THANK YOU for bringing together a very memorable moment. I shared this picture and story on Facebook in the hope that someone might be able to identify the Pilot so I would be able to express my gratitude. Much to my complete surprise, many others also enjoyed this experience and took the time to comment and share in the pride that they have for Southwest Airlines. My heart was touched by the comments from individuals who identified themselves as "that little boy standing there," recalling similar experiences which led them to Southwest Airlines. Those words alone speak volumes about the People who represent Southwest Airlines and the LUV that they share. To those of you who take ordinary moments and create something beautiful and memorable, you have my heartfelt thank you because, sometimes, this is what "it" looks like from the other side of the fence. ... View more

Below is a story that was born out of a Facebook post from Customer Trisha Hughes. The initial post contained a simple thank you and a request to find the Southwest Pilot who was kind enough to brake and wave to her 5-year-old son, Hudson, from the flight deck of a Boeing 737. Using the time the picture was taken and pairing it with our schedule out of Albuquerque's Sunport, we were able to identify the Pilot, Captain Michael Hickey. For one 5-year-old, a Pilot waving back to him from an airplane was more than enough. For Captain Michael Hickey, the wave was only the beginning. The following post tells the story of Trisha and her son after we acknowledged their "firecracker moment" on social media. The associated video goes a bit further. It captures the moment when Captain Hickey reunited with Hudson, the boy waving from the other side of the fence, and allowed him to get a closer look at what being a Pilot is all about. INCLUDES: 1 release 4 photos 1 video ... View more

Carrier celebrates new nonstop service for Metro Washington, D.C., with fares as low as $69 one-way* Southwest Airlines® (NYSE: LUV) is getting into spring fever by extending its flight schedule through April 11, 2016. To help Customers plan travel for spring break and beyond, the carrier is offering special pricing on new flights connecting: Atlanta and Washington, D.C. (Dulles) one-way as low as $69 Omaha and Washington, D.C. (Reagan National) one-way as low as $89 Customers may take advantage of these low fares by booking today through Aug. 14, 2015, 11:59 p.m., in the respective time zone of the originating city for travel March 10 through April 11, 2016.  See complete fare rules, conditions, and exclusions below. The new, daily service between Omaha and Washington, D.C. (Reagan National) will bring Omaha's only nonstop flight to the heart of the nation's capital using large Boeing 737 aircraft. The carrier also is linking Atlanta and Washington, D.C. (Dulles), with daily nonstop service. Customers may book any of these new flights now at Southwest.com or by phone through 800-I-FLY-SWA FARE RULES Purchase from Aug. 11 through Aug. 14, 2015, 11:59 p.m. in the respective time zone of the originating city.  Travel between March 10 and April 11, 2016.  Travel is not valid on Fridays or Sundays and is valid only on nonstop service. Displayed prices include all U.S. and government taxes and fees. Seats are limited. Fares may vary by destination, flight, and day of week and won't be available on some flights that operate during very busy travel times and holiday periods.  Travel is available for one-way Wanna Get Away® Fares. Fares may be combined with other Southwest Airlines combinable fares. If combining with other fares, the most restrictive fare's rules apply. Sale fares may be available on other days of week, but not guaranteed. Fares are nonrefundable but may be applied toward future travel on Southwest Airlines, so long as you cancel your reservations at least ten minutes prior to the scheduled departure of your flight.  Failure to cancel prior to departure will result in forfeiture of remaining funds on the reservation. Any change in itinerary may result in an increase in fare. Standby travel requires an upgrade to the Anytime Fare®. Fares are subject to change until ticketed. Offer applies to published, scheduled service only. ABOUT SOUTHWEST AIRLINES CO. In its 45th year of service, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other air carriers with exemplary Customer Service delivered by more than 47,000 Employees to more than 100 million Customers annually.  Southwest operates more than 3,600 flights a day, serving 95 destinations across the United States and six additional countries.  Southwest service to Belize City, Belize, begins Oct. 15, 2015, and Liberia, Costa Rica, on Nov. 1, 2015, both routes are subject to foreign government approval. Based on the U.S. Department of Transportation's most recent data, Southwest Airlines is the nation's largest carrier in terms of originating domestic passengers boarded. The Company operates the largest fleet of Boeing aircraft in the world, the majority of which are equipped with satellite-based WiFi providing gate-to-gate connectivity while over the United States.  That connectivity enables Customers to use their personal devices to access streaming music provided by Apple Music or to view video on-demand movies and television shows, as well as nearly 20 channels of free, live TV compliments of our valued Partners. *Southwest is the only major U.S. airline to offer bags fly free®  to everyone (first and second checked pieces of luggage, size and weight limits apply, some airlines may allow free checked bags on select routes or for qualified circumstances), and there are no change fees, though fare differences might apply. In 2014, the airline proudly unveiled a bold new look:  Heart.  The new aircraft livery, airport experience, and logo, showcase the dedication of Southwest Employees to connect Customers with what's important in their lives. From its first flights on June 18, 1971, Southwest Airlines launched an era of unprecedented affordability in air travel described by the U.S. Department of Transportation as "The Southwest Effect," a lowering of fares and increase in passenger traffic whenever the carrier enters new markets.  With 42 consecutive years of profitability, Southwest is one of the most honored airlines in the world, known for a triple bottom line approach that contributes to the carrier's performance and productivity, the importance of its People and the communities they serve, and an overall commitment to efficiency and the planet. The 2014 Southwest Airlines One Report™ can be found at SouthwestOneReport.com. Book Southwest Airlines' low fares online at Southwest.com or by phone at 800-I-FLY-SWA.   SOURCE Southwest Airlines ... View more

Southwest Airlines Co. (NYSE: LUV) (the "Company") today reported its July and year-to-date preliminary traffic statistics. The Company flew 11.5 billion revenue passenger miles (RPMs) in July 2015, an 8.2 percent increase from the 10.6 billion RPMs flown in July 2014. Available seat miles (ASMs) increased 7.0 percent to 13.1 billion in July 2015, compared with the July 2014 level of 12.3 billion. The July 2015 load factor was an all-time record 87.7 percent, compared with 86.7 percent in July 2014. Based on these results and current trends, the Company estimates its third quarter 2015 operating revenue per ASM (RASM) will decrease approximately 1.0 percent, compared with third quarter 2014. For the first seven months of 2015, the Company flew 68.2 billion RPMs, compared with 63.4 billion RPMs flown for the same period in 2014, an increase of 7.6 percent. Year-to-date ASMs increased 6.6 percent to a level of 81.9 billion, compared with the 76.8 billion for the same period in 2014. The year-to-date load factor was 83.3 percent, compared with 82.5 percent for the same period in 2014. This release, as well as past news releases about Southwest Airlines Co., is available online at Southwest.com. Southwest Airlines Co. Preliminary Comparative Traffic Statistics JULY 2015 2014 Change Revenue passengers carried 11,042,296 10,311,076 7.1% Enplaned passengers 13,628,493 12,808,749 6.4% Revenue passenger miles (000s) 11,503,195 10,632,595 8.2% Available seat miles (000s) 13,120,858 12,259,044 7.0% Load factor 87.7% 86.7% 1.0 pts. Average length of haul 1,042 1,031 1.1% Trips flown 115,017 113,099 1.7% YEAR-TO-DATE 2015 2014 Change Revenue passengers carried 68,286,034 64,521,999 5.8% Enplaned passengers 83,397,735 79,255,470 5.2% Revenue passenger miles (000s) 68,222,442 63,377,909 7.6% Available seat miles (000s) 81,894,353 76,829,838 6.6% Load factor 83.3% 82.5% 0.8 pts. Average length of haul 999 982 1.7% Trips flown 737,896 740,080 (0.3)%   SOURCE Southwest Airlines Co. ... View more

Carrier celebrates milestone of 180 daily departures to 50 nonstop destinations from Dallas Love Field The People of Southwest Airlines® (NYSE: LUV) today began operating the carrier's most robust schedule ever offered at Dallas Love Field, with 180 daily departures to 50 nonstop destinations across the United States. New flights now bring Customers nonstop service options between Dallas Love Field and Boston (Logan); Detroit; Philadelphia; Pittsburgh; Charlotte; Charleston, S.C.; Raleigh-Durham; Omaha; and Salt Lake City. "Southwest is offering something no other airline can offer from Dallas Love Field: an unmatched number of cities available on a nonstop basis," said Bob Jordan, Southwest Airlines' Executive Vice President and Chief Commercial Officer. "With these flights, we're bringing more seats, more low fares, and the time-saving itineraries our Customers want without nickel and diming them." In October 2014, most federal flight restrictions at Dallas Love Field lifted, allowing Southwest the opportunity to expand nonstop service at its hometown airport and bring new low-fare competition between the Dallas metro area and major destinations across the country. Before the restrictions were repealed, Southwest served 16 destinations with nonstop service. The carrier today also began the first nonstop flights between Columbus, Ohio and Oakland (San Francisco Bay Area) and between Columbus and Boston (Logan). In addition, the carrier is adding a third daily flight between Columbus and Atlanta. At Washington, D.C. (Reagan National), Southwest is inaugurating new nonstop service between the nation's capital and Ft. Lauderdale/Hollywood International. On the west coast, Southwest is adding new nonstop service between Orange County/Santa Ana and Portland, Oregon. Customers may book any of these new flights at Southwest.com or by phone at 800-I-FLY-SWA. ABOUT SOUTHWEST AIRLINES CO. In its 45th year of service, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other air carriers with exemplary Customer Service delivered by more than 47,000 Employees to more than 100 million Customers annually.  Southwest operates more than 3,600 flights a day, serving 95 destinations across the United States and six additional countries.  Southwest service to Belize City, Belize, begins Oct. 15, 2015, and to Liberia, Costa Rica begins Nov. 1, 2015; both routes are subject to foreign government approval. Based on the U.S. Department of Transportation's most recent data, Southwest Airlines is the nation's largest carrier in terms of originating domestic passengers boarded. The Company operates the largest fleet of Boeing aircraft in the world, the majority of which are equipped with satellite-based WiFi providing gate-to-gate connectivity while over the United States.  That connectivity enables Customers to use their personal devices to access streaming music provided by Apple Music or to view video on-demand movies and television shows, as well as nearly 20 channels of free, live TV compliments of our valued Partners. Southwest is the only major U.S. airline to offer bags fly free®  to everyone (first and second checked pieces of luggage, size and weight limits apply, some airlines may allow free checked bags on select routes or for qualified circumstances), and there are no change fees, though fare differences might apply. In 2014, the airline proudly unveiled a bold new look:  Heart.  The new aircraft livery, airport experience, and logo, showcase the dedication of Southwest Employees to connect Customers with what's important in their lives. From its first flights on June 18, 1971, Southwest Airlines launched an era of unprecedented affordability in air travel described by the U.S. Department of Transportation as "The Southwest Effect," a lowering of fares and increase in passenger traffic whenever the carrier enters new markets.  With 42 consecutive years of profitability, Southwest is one of the most honored airlines in the world, known for a triple bottom line approach that contributes to the carrier's performance and productivity, the importance of its People and the communities they serve, and an overall commitment to efficiency and the planet. The 2014 Southwest Airlines One Report™ can be found at SouthwestOneReport.com. Book Southwest Airlines' low fares online at Southwest.com or by phone at 800-I-FLY-SWA.   SOURCE Southwest Airlines ... View more

Southwest Airlines' (NYSE: LUV) Board of Directors declared a quarterly dividend of $.075 per share to Shareholders of record at the close of business on August 20, 2015 on all shares then issued and outstanding. The 156th consecutive dividend will be paid on September 10, 2015.   SOURCE Southwest Airlines ... View more

The Board of Directors of Southwest Airlines (NYSE: LUV) announced today that Ron Ricks, 65, has been elected as Vice Chairman of the Board. Concurrently, Ricks announced that he is retiring from his position as Executive Vice President and Chief Legal and Regulatory Officer after serving as an Officer of Southwest Airlines for the past 29 years. "Ron has provided counsel to Southwest Airlines since the early years of the Company, and I am delighted that he will continue to provide leadership and guidance through his role as Vice Chairman," said Gary Kelly, Chairman of the Board, President, and Chief Executive Officer. Ricks will remain a non-Officer Employee of the Company to assist with the transition of complex legal projects and specialized governmental affairs issues. Before joining Southwest Airlines, Ricks was a partner in the San Antonio law firm founded by Herb Kelleher, working extensively on the Southwest Airlines account. Altogether, Ricks has represented Southwest since 1981. Southwest Airlines announced these additional leadership changes, all reporting to Kelly: Tammy Romo was promoted to Executive Vice President and Chief Financial Officer. In addition to maintaining her most recent responsibilities as Sr. Vice President and CFO, the leadership of Supply Chain Management now reports to Romo. Romo joined Southwest Airlines in 1991. Mark Shaw was promoted to Sr. Vice President General Counsel and Corporate Secretary. In addition to maintaining his responsibilities over the Company's General Counsel Department, Governmental Affairs leadership now reports to Shaw. Shaw has been with Southwest Airlines since 2000. Jeff Lamb, who has been with Southwest Airlines since 2004, maintains the responsibilities of his most recent role as Executive Vice President Chief People and Administrative Officer, and expands his leadership to now include Airport Affairs. His new title is Executive Vice President Corporate Services. ABOUT SOUTHWEST AIRLINES CO. In its 45th year of service, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other air carriers with exemplary Customer Service delivered by more than 47,000 Employees to more than 100 million Customers annually. Southwest operates more than 3,600 flights a day, serving 95 destinations across the United States and six additional countries. Southwest service to Belize City, Belize, begins Oct. 15, 2015, and to Liberia, Costa Rica, on Nov. 1, 2015, both routes are subject to foreign government approval. Based on the U.S. Department of Transportation's most recent data, Southwest Airlines is the nation's largest carrier in terms of originating domestic passengers boarded. The Company operates the largest fleet of Boeing aircraft in the world, the majority of which are equipped with satellite-based WiFi providing gate-to-gate connectivity while over the United States. That connectivity enables Customers to use their personal devices to access streaming music provided by Apple Music or to view video on-demand movies and television shows, as well as nearly 20 channels of free, live TV compliments of our valued Partners. Southwest is the only major U.S. airline to offer bags fly free®  to everyone (first and second checked pieces of luggage, size and weight limits apply, some airlines may allow free checked bags on select routes or for qualified circumstances), and there are no change fees, though fare differences might apply. In 2014, the airline proudly unveiled a bold new look: Heart. The new aircraft livery, airport experience, and logo, showcase the dedication of Southwest Employees to connect Customers with what's important in their lives. From its first flights on June 18, 1971, Southwest Airlines launched an era of unprecedented affordability in air travel described by the U.S. Department of Transportation as "The Southwest Effect," a lowering of fares and increase in passenger traffic whenever the carrier enters new markets. With 42 consecutive years of profitability, Southwest is one of the most honored airlines in the world, known for a triple bottom line approach that contributes to the carrier's performance and productivity, the importance of its People and the communities they serve, and an overall commitment to efficiency and the planet. The 2014 Southwest Airlines One Report™ can be found at SouthwestOneReport.com. Book Southwest Airlines' low fares online at Southwest.com or by phone at 800-I-FLY-SWA.   SOURCE Southwest Airlines ... View more

Southwest Airlines (NYSE: LUV) today announced that its Flight Attendants have voted down a tentative agreement that would have ended two years of negotiations. Representatives for Transport Workers Union (TWU) Local 556 say Flight Attendants rejected the deal by 87 percent of those casting ballots. Nearly 89 percent of eligible Flight Attendants voted. "This agreement ensured that our Flight Attendants would stay atop the industry in pay and benefits," said Randy Babbitt, Southwest Senior Vice President Labor Relations. "It improved the Company's competitiveness with certain work-rule changes and supported our evolving network, both domestically and in international markets. So naturally we're disappointed that it didn't pass." The deal was slated to run through May 2019 and contained fixed wage increases, cash bonuses, and quality of life improvements. Southwest says it remains committed to reaching an agreement that best serves the interests of both the Company and its Flight Attendants. "Knowing how volatile our industry can be, I can't imagine a better time to secure an agreement," said Vice President Cabin Services Mike Hafner. "But together we will find a way to move forward. Southwest Flight Attendants are the finest in the industry, and I am continuously proud of their consistent efforts and the caring service they provide our Customers." Southwest expects TWU leadership will take some time to evaluate the results prior to returning to direct bargaining. But for now, Southwest Flight Attendants will continue working under the terms of their current agreement, which became amendable May 31, 2013. ABOUT SOUTHWEST AIRLINES CO. In its 45th year of service, Dallas-based Southwest Airlines (NYSE: LUV) continues to differentiate itself from other air carriers with exemplary Customer Service delivered by more than 47,000 Employees to more than 100 million Customers annually.  Southwest operates more than 3,600 flights a day, serving 95 destinations across the United States and six additional countries.  Southwest service to Belize City, Belize, begins Oct. 15, 2015, and Liberia, Costa Rica, on Nov. 1, 2015, both routes are subject to foreign government approval. Based on the U.S. Department of Transportation's most recent data, Southwest Airlines is the nation's largest carrier in terms of originating domestic passengers boarded. The Company operates the largest fleet of Boeing aircraft in the world, the majority of which are equipped with satellite-based WiFi providing gate-to-gate connectivity while over the United States.  That connectivity enables Customers to use their personal devices to access streaming music provided by Beats Music or to view video on-demand movies and television shows, as well as nearly 20 channels of free, live TV compliments of our valued Partners. Southwest is the only major U.S. airline to offer bags fly free®  to everyone (first and second checked pieces of luggage, size and weight limits apply, some airlines may allow free checked bags on select routes or for qualified circumstances), and there are no change fees, though fare differences might apply. In 2014, the airline proudly unveiled a bold new look:  Heart.  The new aircraft livery, airport experience, and logo, showcase the dedication of Southwest Employees to connect Customers with what's important in their lives. From its first flights on June 18, 1971, Southwest Airlines launched an era of unprecedented affordability in air travel described by the U.S. Department of Transportation as "The Southwest Effect," a lowering of fares and increase in passenger traffic whenever the carrier enters new markets.  With 42 consecutive years of profitability, Southwest is one of the most honored airlines in the world, known for a triple bottom line approach that contributes to the carrier's performance and productivity, the importance of its People and the communities they serve, and an overall commitment to efficiency and the planet. The 2014 Southwest Airlines One Report™ can be found at SouthwestOneReport.com. Book Southwest Airlines' low fares online at Southwest.com or by phone at 800-I-FLY-SWA. ... View more

Southwest Airlines (NYSE:LUV) (the "Company") today reported its second quarter 2015 results:  Record quarterly net income, excluding special items 1 , of $691 million, or $1.03 per diluted share. This represented a $206 million increase from second quarter 2014 and exceeded the First Call consensus estimate of $1.02 per diluted share. Record quarterly GAAP 2 net income of $608 million, or $.90 per diluted share. Record quarterly GAAP operating income of $1.1 billion. Excluding special items, record quarterly operating income of $1.1 billion, resulting in an operating margin 3 of 22.5 percent. Returned $430 million to Shareholders through dividends and share repurchases during second quarter 2015, and $811 million during first half 2015. Return on invested capital, before taxes and excluding special items (ROIC) 1 , for the 12 months ended June 30, 2015, of 28.2 percent, compared with 17.1 percent for the 12 months ended June 30, 2014. Subsequent to June 30, 2015, the Company amended and extended its co-branded credit card agreement with Chase Bank USA, N.A. (Chase), which is expected to provide generous rewards to the Company's co-branded credit cardholders and significant future value to the Company's Shareholders. The Company currently estimates its second half 2015 GAAP operating revenues will increase approximately $400 million from the combined impact of the amended agreement and the effect of a change in accounting methodology 4 . Gary C. Kelly, Chairman of the Board, President, and Chief Executive Officer, stated, "We are delighted to report another strong quarter of earnings. Our net income, excluding special items, of $691 million, or $1.03 per diluted share, is an all-time quarterly high and represents our ninth consecutive quarter of record profits. Operating income, excluding special items, increased 40.2 percent year-over-year, producing a strong 22.5 percent operating margin. We significantly expanded our margins and generated very strong cash flows during first half 2015, allowing us to return $811 million to Shareholders through dividends and share repurchases so far this year. In addition, we intend to launch a $500 million accelerated share repurchase program soon. We have a solid investment grade balance sheet, and we are pleased with the recent upgrade to Baa1 by Moody's. For first half 2015, our record profits have earned our outstanding Employees a record $308 million profitsharing accrual, nearly doubling first half 2014's contribution. For the 12 months ended June 30, 2015, our ROIC was an outstanding 28.2 percent, far surpassing our cost of capital. Our 2015 results, thus far, are exceptional, and our current outlook for the second half of 2015 is also strong, laying a solid foundation to surpass 2014's ROIC.  "Fuel savings 5 in second quarter 2015 were nearly $500 million, which led to a reduction in our second quarter 2015 unit costs, excluding special items, of almost 12 percent year-over-year. Second quarter 2015 economic fuel costs were $2.02 per gallon, compared with $3.02 per gallon in second quarter 2014. Based on our existing fuel derivative contracts and market prices as of July 20, 2015, we expect significant year-over-year fuel savings again in third quarter 2015, with economic fuel costs currently estimated to be approximately $2.20 per gallon, as compared with third quarter 2014's $2.94 per gallon. "We also were very pleased with our overall cost performance. Our cost control efforts, ongoing fleet modernization, and improved aircraft utilization resulted in a 1.8 percent year-over-year decline in our second quarter 2015 unit costs, excluding fuel and oil expense, special items, and second quarter 2015's record profitsharing expense of $182 million. Based on current cost trends, and excluding fuel and oil expense, special items, and profitsharing, we expect third quarter 2015 unit costs to decline approximately one percent and full year 2015 unit costs to decline approximately two percent, both compared with the same year-ago periods. "Our second quarter 2015 operating unit revenue performance was impacted by challenging year-over-year comparisons, longer average stage length, higher average seats per trip (gauge), and a softer yield environment. Still, we grew second quarter 2015 operating revenues 2.0 percent to a record $5.1 billion on a year-over-year increase in available seat miles (ASMs) of 7.0 percent. Demand for our popular low fares remained strong throughout the quarter resulting in a record 84.6 percent load factor. Our second quarter 2015 unit revenues declined 4.7 percent, as expected, driven largely by the 5.4 percent decline in passenger revenue yields, both as compared with second quarter last year. The year-ago results included $47 million in additional passenger revenue due to a change to previously recorded estimates of tickets expected to spoil in the future, which impacted second quarter 2015 year-over-year unit revenue comparisons by approximately one percent. Another two to three percent of the second quarter 2015 year-over-year unit revenue decline was driven by a 4.6 percent increase in average stage length and a 2.4 percent increase in gauge, both as compared with second quarter 2014. "We continue to be extremely pleased with our development markets in Dallas. They are remarkably strong, surpassing system average margins and returns. In April, we launched nine additional daily nonstop flights, bringing our total daily flights out of Love Field to 166. By August 2015, we are scheduled to operate 180 weekday departures to 50 nonstop destinations. "Our international expansion is also progressing, as planned, and producing expected results. We began service to Puerto Vallarta (PVR) in June and announced daily service between PVR and Denver beginning in November 2015, pending foreign government approval. We are excited to begin service by the end of this year between eight international cities and Houston (Hobby), including inaugural service to Belize City, Belize in October 2015, and Liberia, Costa Rica in November 2015, both pending foreign government approvals. "Earlier this month, we were delighted to amend and extend our long-standing partnership with Chase for our co-branded credit card agreement. Beginning in third quarter 2015 and continuing thereafter, we expect to realize significant revenue enhancements. Since we re-launched our award-winning frequent flyer program in 2011, we have nearly doubled the size of our program, in terms of membership, and grown our credit card program, proportionately. "While some yield softness has continued into July, demand thus far remains strong. Based on current bookings and revenue trends, and including the estimated benefit to operating revenues from our amended co-branded credit card agreement, we are currently estimating third quarter 2015 unit revenues to decline a modest one percent from third quarter 2014. Taking into consideration the ongoing impact of increased stage and gauge, as well as 18 percent of our network under development in third quarter 2015, we are very pleased with our third quarter revenue outlook. "Overall, our network performance is exceptional. For this year, we are growing our ASMs approximately seven percent, year-over-year. The annualized impact of our 2015 expansion is expected to contribute the majority of 2016's year-over-year capacity growth. As we continue to optimize our network, we are currently planning to grow our total 2016 ASMs in the five to six percent range, year-over-year, with the goal to sustain strong margins and ROIC levels in line with 2015." Financial Results The Company's second quarter 2015 total operating revenues were $5.1 billion, a 2.0 percent increase compared with second quarter 2014, largely driven by second quarter 2015 passenger revenues of $4.9 billion. In second quarter 2014, the Company recorded $47 million in additional passenger revenues due to a change to previously recorded estimates of tickets expected to spoil in the future, contributing to the challenging year-over-year comparisons in second quarter 2015 revenue trends.  Subsequent to June 30, 2015, the Company executed an amended co-branded credit card agreement with Chase, through which the Company sells loyalty points and other items to Chase. For accounting purposes, the amended agreement materially modifies the previously existing agreement between Chase and the Company and is subject to Accounting Standards Update 2009-13, "Multiple-Deliverable Revenue Arrangements - a consensus of the FASB Emerging Issues Task Force" (ASU 2009-13). The Company currently estimates that the combined impact from the amended agreement and the effect of the change in accounting methodology to ASU 2009-13 will increase its GAAP operating revenues by approximately $400 million in second half 2015, as compared with the same period last year. Under the transition provisions of ASU 2009-13, the existing deferred revenue liability will be revalued to reflect the estimated selling price of the undelivered elements of the contract at the date of the amended agreement. As a result, and included within the estimated increase to GAAP operating revenues of approximately $400 million in second half 2015, the Company expects to record a one-time non-cash reduction to the deferred revenue liability with a corresponding increase to operating revenues in third quarter 2015 of approximately $150 million, which will be recorded as a special revenue item and is, therefore, excluded from the Company's outlook on third quarter 2015 unit revenues. The remaining approximately $250 million estimated benefit will be included in second half 2015 unit revenues. The estimated portion of that amount related to third quarter 2015 was included in the Company's current outlook for a third quarter 2015 unit revenue decline of approximately one percent, year-over-year. Total operating expenses in second quarter 2015 decreased 5.0 percent to $4.0 billion, compared with second quarter 2014. During second quarter 2015, the Company expensed $55 million (before profitsharing and taxes) related to the proposed ratification bonuses included in the tentative collective-bargaining agreement recently reached with the Company's Flight Attendants and related to the ratification bonuses paid to Dispatchers, Meteorologists, and Flight Simulator Technicians, which are special items. Excluding special items in both periods, total operating expenses in second quarter 2015 decreased 5.5 percent to $4.0 billion, compared with second quarter 2014. Second quarter 2015 economic fuel costs were $2.02 per gallon, including $.08 per gallon in unfavorable cash settlements from fuel derivative contracts, compared with $3.02 per gallon in second quarter 2014, including $.05 per gallon in favorable cash settlements from fuel derivative contracts. As of July 20, 2015, the fair market value of the Company's fuel derivative contracts was a net liability of approximately $1.3 billion for the fuel hedge portfolio through 2018, including a $308 million net liability related to the remainder of 2015. Additional information regarding the Company's fuel derivative contracts is included in the accompanying tables. Excluding fuel and oil expense and special items in both periods, second quarter 2015 operating costs increased 6.9 percent from second quarter 2014, partially due to the second quarter 2015 profitsharing expense of $182 million, compared with $127 million in second quarter 2014. Excluding fuel and oil expense, special items, and profitsharing in both periods, second quarter 2015 operating costs increased 5.1 percent from second quarter 2014, and decreased 1.8 percent on a unit basis.  Operating income in second quarter 2015 was a record $1.1 billion, compared with $775 million in second quarter 2014. Excluding special items, operating income was also a record $1.1 billion in second quarter 2015, compared with $819 million in second quarter 2014. Other expenses in second quarter 2015 were $108 million, compared with $29 million in second quarter 2014. The $79 million increase primarily resulted from $88 million in other losses recognized in second quarter 2015, compared with $3 million in second quarter 2014. In both periods, these losses included ineffectiveness and unrealized mark-to-market amounts associated with a portion of the Company's fuel hedge portfolio, which are special items. Excluding these special items, second quarter 2015 had $19 million in other losses, compared with $15 million in second quarter 2014, primarily attributable to the premium costs associated with the Company's fuel derivative contracts. Third quarter 2015 premium costs related to fuel derivative contracts are currently estimated to be in the $30 million to $35 million range, compared with $15 million in third quarter 2014. Net interest expense in second quarter 2015 was $20 million, compared with $26 million in second quarter 2014. Second quarter 2015 net income was $608 million, or $.90 per diluted share, which included $83 million (net) of unfavorable special items, compared with second quarter 2014 net income of $465 million, or $.67 per diluted share, which included $20 million (net) of unfavorable special items. Excluding special items, second quarter 2015 net income was $691 million, or $1.03 per diluted share, compared with second quarter 2014 net income, excluding special items, of $485 million, or $.70 per diluted share. For the six months ended June 30, 2015, total operating revenues increased 3.8 percent to $9.5 billion, while total operating expenses decreased 6.4 percent to $7.7 billion, resulting in operating income of $1.9 billion, compared with $991 million for the same period last year. Excluding special items, operating income was $1.9 billion for first half 2015, compared with $1.1 billion for first half 2014. Net income for first half 2015 was $1.1 billion, or $1.57 per diluted share, compared with $617 million, or $0.88 per diluted share, for the same period last year. Excluding special items, net income for first half 2015 was $1.1 billion, or $1.69 per diluted share, compared with $611 million, or $0.87 per diluted share, for the same period last year. Balance Sheet and Cash Flows As of June 30, 2015, the Company had approximately $3.1 billion in cash and short-term investments, and a fully available unsecured revolving credit line of $1 billion. Net cash provided by operations during second quarter 2015 was $627 million, capital expenditures were $428 million, and assets constructed for others, net of reimbursements, were $19 million, resulting in free cash flow 1 of $180 million. The Company repaid $40 million in debt and capital lease obligations during second quarter 2015, and intends to repay approximately $95 million in debt and capital lease obligations during the remainder of 2015. The Company funded $355 million to its ProfitSharing Plan during second quarter 2015 as a result of its 2014 results. In past years, the Company's annual profitsharing contribution was funded in third quarter. During second quarter 2015, the Company returned $430 million to its Shareholders through the payment of $50 million in dividends and the repurchase of $380 million in common stock. The Company completed its previous $1.0 billion share repurchase program with the repurchase of $80 million in common stock, or 1.9 million shares, during second quarter 2015. On May 13, 2015, the Company's Board of Directors authorized a new $1.5 billion share repurchase program, along with a 25 percent increase in the Company's quarterly dividend. Under the new $1.5 billion share repurchase program, the Company repurchased $300 million in common stock, or 8.1 million shares, pursuant to an accelerated share repurchase (ASR) program launched and completed during the quarter, bringing total shares repurchased during second quarter 2015 to approximately 10 million. In addition, during second quarter 2015, the Company received the remaining 1.8 million shares pursuant to the first quarter 2015 $300 million ASR program, bringing the total shares repurchased under that ASR program to 6.9 million. For first half 2015, free cash flow was a strong $1.0 billion which enabled the Company to return $811 million to Shareholders through the payment of $131 million in dividends and the repurchase of $680 million in common stock. The Company intends to repurchase an additional $500 million of Southwest common stock under an ASR program expected to be launched soon, which would bring total repurchases of common stock in 2015 to nearly $1.2 billion. Subsequent to the launch of the planned $500 million ASR program, the Company will have $700 million remaining under its existing $1.5 billion share repurchase program. Fleet During second quarter 2015, the Company's fleet increased by ten to 689 aircraft at period end. This reflects the second quarter delivery of six new Boeing 737-800s and five pre-owned Boeing 737-700s, as well as the retirement of one Boeing 737 Classic aircraft. The Company continues to manage to roughly 700 aircraft in 2015 and continues to expect to grow its net fleet approximately two percent, year-over-year, in 2016. As an extension of its fleet modernization initiatives, during second quarter 2015, the Company designated its 31 Boeing firm orders in 2016 as 737-800s rather than 737-700s and added 31 pre-owned 737-700 aircraft scheduled for delivery through 2018. In addition, subsequent to June 30, 2015, the Company canceled the 12 737NG options scheduled for delivery in 2016.  Additional information regarding these revisions to the Company's aircraft delivery schedule is included in the accompanying tables. Awards and Recognitions Recognized for Best Redemption Ability, Best Airline Customer Service, and Best Loyalty Credit Card by InsideFlyer for its Rapid Rewards program Named as one of CR's 100 Best Corporate Citizens 2015 Designated a 2015 Most Valuable Employer for military by CivilianJobs.com Received CIO 100 Award from CIO Magazine Named to BetterInvesting's Top 100 Company list Received a 2015 Texas Excellence Award from the U.S. Commerce & Trade Research Institute Conference Call The Company will discuss its second quarter 2015 results on a conference call at 12:30 p.m. Eastern Time today. A live broadcast of the conference call also will be available at http://southwest.investorroom.com. 1 See Note Regarding Use of Non-GAAP Financial Measures for additional information on special items, ROIC, and free cash flow. In addition, information regarding special items and ROIC is included in the accompanying reconciliation tables. 2 Generally Accepted Accounting Principles in the United States. 3 Operating margin, excluding special items, is calculated as operating income, excluding special items, divided by operating revenues. See Note Regarding Use of Non-GAAP Financial Measures. 4 Additional information regarding the co-branded credit card agreement and the change in accounting methodology is included in the Financial Results section of this release. 5 Fuel savings is calculated as second quarter 2015 fuel consumed, in gallons, multiplied by the year-over-year change in economic fuel costs per gallon, including fuel tax. Cautionary Statement Regarding Forward-Looking Statements 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 related to (i) the Company's financial outlook, expectations, and projected results of operations, including specific factors expected to impact the Company's results of operations; (ii) the Company's plans and goals with respect to returning value to Shareholders, including its share repurchase plans; (iii) the Company's plans and expectations related to managing risk associated with changing jet fuel prices; (iv) the Company's network plans, goals, opportunities, and expectations, including its plans and expectations with respect to international operations; (v) the Company's capacity and fleet plans and expectations; (vi) the Company's expectations with respect to liquidity (including its plans for the repayment of debt and capital lease obligations); and (vii) the Company's aircraft delivery schedule. 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) changes in demand for the Company's services and other changes in consumer behavior (including with respect to the Company's co-branded credit card); (ii) the impact of economic conditions, fuel prices, actions of competitors (including without limitation pricing, scheduling, and capacity decisions and consolidation and alliance activities), and other factors beyond the Company's control, on the Company's business decisions, plans, and strategies; (iii) changes in aircraft fuel prices, the impact of hedge accounting, and any changes to the Company's fuel hedging strategies and positions; (iv) the impact of governmental regulations and other governmental actions related to the Company's operations; (v) the Company's ability to timely and effectively implement, transition, and maintain the necessary information technology systems and infrastructure to support its operations and initiatives; (vi) the Company's dependence on third parties, in particular with respect to its technology and fleet plans; (vii) the Company's ability to timely and effectively prioritize its strategic initiatives and related expenditures; and (viii) 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, 2014.   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, 2015 2014 Percent Change 2015 2014 Percent Change OPERATING REVENUES: Passenger $ 4,852 $ 4,752 2.1 $ 9,030 $ 8,685 4.0 Freight 46 44 4.5 90 84 7.1 Other 213 215 (0.9) 405 409 (1.0)      Total operating revenues 5,111 5,011 2.0 9,525 9,178 3.8 OPERATING EXPENSES: Salaries, wages, and benefits 1,607 1,406 14.3 3,026 2,680 12.9 Fuel and oil 1,005 1,425 (29.5) 1,882 2,739 (31.3) Maintenance materials and repairs 240 236 1.7 469 486 (3.5) Aircraft rentals 59 75 (21.3) 119 156 (23.7) Landing fees and other rentals 299 295 1.4 584 560 4.3 Depreciation and amortization 250 228 9.6 494 449 10.0 Acquisition and integration 3 38 (92.1) 26 56 (53.6) Other operating expenses 563 533 5.6 1,060 1,061 (0.1)      Total operating expenses 4,026 4,236 (5.0) 7,660 8,187 (6.4) OPERATING INCOME 1,085 775 40.0 1,865 991 88.2 OTHER EXPENSES (INCOME): Interest expense 29 34 (14.7) 62 66 (6.1) Capitalized interest (7) (6) 16.7 (14) (12) 16.7 Interest income (2) (2) — (3) (3) — Other (gains) losses, net 88 3 n.m. 121 (50) n.m.      Total other expenses (income) 108 29 272.4 166 1 n.m. INCOME BEFORE INCOME TAXES 977 746 31.0 1,699 990 71.6 PROVISION FOR INCOME TAXES 369 281 31.3 638 373 71.0 NET INCOME $ 608 $ 465 30.8 $ 1,061 $ 617 72.0 NET INCOME PER SHARE: Basic $ 0.91 $ 0.67 35.8 $ 1.58 $ 0.89 77.5 Diluted $ 0.90 $ 0.67 34.3 $ 1.57 $ 0.88 78.4 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 665 690 (3.6) 670 694 (3.5) Diluted 673 698 (3.6) 678 703 (3.6)   Southwest Airlines Co. Reconciliation of Reported Amounts to Non-GAAP Items (See Note Regarding Use of Non-GAAP Financial Measures) (in millions, except per share amounts)(unaudited) Three months ended Six months ended June 30, June 30, 2015 2014 Percent Change 2015 2014 Percent Change Fuel and oil expense, unhedged $ 962 $ 1,444 $ 1,792 $ 2,776 Add (Deduct): Fuel hedge (gains) losses included in Fuel and oil expense 43 (19) 90 (37) Fuel and oil expense, as reported $ 1,005 $ 1,425 $ 1,882 $ 2,739 Deduct: Net impact from fuel contracts (1) (5) (6) (9) (14) Fuel and oil expense, (economic) $ 1,000 $ 1,419 (29.5) $ 1,873 $ 2,725 (31.3) Total operating expenses, as reported $ 4,026 $ 4,236 $ 7,660 $ 8,187 Deduct: Net impact from fuel contracts (1) (5) (6) (9) (14) Deduct: Acquisition and integration costs (3) (38) (26) (56) Add: Litigation settlement — — 37 — Deduct: Labor ratification bonuses (55) — (55) — Total operating expenses, non-GAAP $ 3,963 $ 4,192 (5.5) $ 7,607 $ 8,117 (6.3) Deduct: Fuel and oil expense, non-GAAP (economic) (1,000) (1,419) (1,873) (2,725) Operating expenses, non-GAAP, excluding Fuel and oil expense $ 2,963 $ 2,773 6.9 $ 5,734 $ 5,392 6.3 Deduct: Profitsharing expense (182) (127) (308) (156) Operating expenses, non-GAAP, excluding Profitsharing and Fuel and oil expense $ 2,781 $ 2,646 5.1 $ 5,426 $ 5,236 3.6 Operating income, as reported $ 1,085 $ 775 $ 1,865 $ 991 Add : Net impact from fuel contracts (1) 5 6 9 14 Add: Acquisition and integration costs 3 38 26 56 Deduct: Litigation settlement — — (37) — Add: Labor ratification bonuses 55 — 55 — Operating income, non-GAAP $ 1,148 $ 819 40.2 $ 1,918 $ 1,061 80.8 Other (gains) losses, net, as reported $ 88 $ 3 $ 121 $ (50) Add (Deduct): Net impact from fuel contracts (1) (69) 12 (76) 81 Other (gains) losses, net, non-GAAP $ 19 $ 15 26.7 $ 45 $ 31 45.2 Net income, as reported $ 608 $ 465 $ 1,061 $ 617 Add (Deduct): Net impact from fuel contracts (1) 74 (6) 85 (67) Add (Deduct): Income tax impact of fuel contracts (27) 2 (31) 26 Add: Acquisition and integration costs (2) 2 24 16 35 Deduct: Litigation settlement (2) — — (23) — Add: Labor ratification bonuses (2) 34 — 34 — Net income, non-GAAP $ 691 $ 485 42.5 $ 1,142 $ 611 86.9 Net income per share, diluted, as reported $ 0.90 $ 0.67 $ 1.57 $ 0.88 Add (Deduct): Net impact from fuel contracts (2) 0.07 (0.01) 0.07 (0.06) Add: Impact of special items (2) 0.06 0.04 0.05 0.05 Net income per share, diluted, non-GAAP $ 1.03 $ 0.70 47.1 $ 1.69 $ 0.87 94.3 (1) See Reconciliation of Impact from Fuel Contracts. (2) Amounts net of tax.   Southwest Airlines Co. Reconciliation of Impact from Fuel Contracts (See Note Regarding Use of Non-GAAP Financial Measures) (in millions) (unaudited) Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Fuel and oil expense Reclassification between Fuel and oil and Other (gains) losses, net, associated with current period settled contracts $ — $ — $ — $ — Contracts settling in the current period, but for which gains have been recognized in a prior period (1) (5) (6) (9) (14) Impact from fuel contracts to Fuel and oil expense $ (5) $ (6) $ (9) $ (14) Operating Income Reclassification between Fuel and oil and Other (gains) losses, net, associated with current period settled contracts $ — $ — $ — $ — Contracts settling in the current period, but for which gains have been recognized in a prior period (1) 5 6 9 14 Impact from fuel contracts to Operating Income $ 5 $ 6 $ 9 $ 14 Other (gains) losses, net Mark-to-market impact from fuel contracts settling in future periods $ (71) $ (16) $ (91) $ 40 Ineffectiveness from fuel hedges settling in future periods 2 28 15 41 Reclassification between Fuel and oil and Other (gains) losses, net, associated with current period settled contracts — — — — Impact from fuel contracts to Other (gains) losses, net $ (69) $ 12 $ (76) $ 81 Net Income Mark-to-market impact from fuel contracts settling in future periods $ 71 $ 16 $ 91 $ (40) Ineffectiveness from fuel hedges settling in future periods (2) (28) (15) (41) Other net impact of fuel contracts settling in the current or a prior period (excluding reclassifications) 5 6 9 14 Impact from fuel contracts to Net Income (2) $ 74 $ (6) $ 85 $ (67) (1) As a result of prior hedge ineffectiveness and/or contracts marked-to-market through the income statement. (2) Before income tax impact of unrealized items.   Southwest Airlines Co. Comparative Consolidated Operating Statistics (unaudited) Three months ended Six months ended June 30, June 30, 2015 2014 Change 2015 2014 Change Revenue passengers carried 30,800,742 29,155,114 5.6% 57,243,738 54,210,923 5.6% Enplaned passengers 37,670,284 35,790,140 5.3% 69,769,242 66,446,721 5.0% Revenue passenger miles (RPMs) (000s) (1) 30,858,381 28,589,997 7.9% 56,719,247 52,745,314 7.5% Available seat miles (ASMs) (000s) (2) 36,476,030 34,096,212 7.0% 68,773,495 64,570,794 6.5% Load factor (3) 84.6% 83.9% 0.7 pts. 82.5% 81.7% 0.8 pts. Average length of passenger haul (miles) 1,002 981 2.1% 991 973 1.8% Average aircraft stage length (miles) 756 723 4.6% 748 717 4.3% Trips flown 326,309 327,343 (0.3)% 622,879 626,981 (0.7)% Seats flown (4) 47,612,415 46,662,111 2.0% 90,856,819 89,208,921 1.8% Seats per trip (5) 145.91 142.55 2.4% 145.87 142.28 2.5% Average passenger fare $ 157.51 $ 163.00 (3.4)% $ 157.74 $ 160.21 (1.5)% Passenger revenue yield per RPM (cents) (6) 15.72 16.62 (5.4)% 15.92 16.47 (3.3)% RASM (cents) (7) 14.01 14.70 (4.7)% 13.85 14.21 (2.5)% PRASM (cents) (8) 13.30 13.94 (4.6)% 13.13 13.45 (2.4)% CASM (cents) (9) 11.04 12.42 (11.1)% 11.14 12.68 (12.1)% CASM, excluding Fuel and oil expense (cents) 8.29 8.25 0.5% 8.40 8.44 (0.5)% CASM, excluding special items (cents) 10.86 12.30 (11.7)% 11.06 12.57 (12.0)% CASM, excluding Fuel and oil expense and special items (cents) 8.13 8.14 (0.1)% 8.34 8.35 (0.1)% CASM, excluding Fuel and oil expense, special items, and profitsharing (cents) 7.63 7.77 (1.8)% 7.89 8.11 (2.7)% Fuel costs per gallon, including fuel tax (unhedged) $ 1.94 $ 3.07 (36.8)% $ 1.93 $ 3.10 (37.7)% Fuel costs per gallon, including fuel tax $ 2.03 $ 3.03 (33.0)% $ 2.02 $ 3.06 (34.0)% Fuel costs per gallon, including fuel tax (economic) $ 2.02 $ 3.02 (33.1)% $ 2.01 $ 3.05 (34.1)% Fuel consumed, in gallons (millions) 493 469 5.1% 927 892 3.9% Active fulltime equivalent Employees 47,645 45,508 4.7% 47,645 45,508 4.7% Aircraft at end of period (10) 689 683 0.9% 689 683 0.9% (1) A revenue passenger mile is one paying passenger flown one mile. Also referred to as "traffic," which is a measure of demand for a given period. (2) An available seat mile is one seat (empty or full) flown one mile. Also referred to as "capacity," which is a measure of the space available to carry passengers in a given period. (3) Revenue passenger miles divided by available seat miles. (4) Seats flown is calculated using total number of seats available by aircraft type multiplied by the total trips flown by the same aircraft type during a particular period. (5) Seats per trip is calculated using seats flown divided by trips flown. Also referred to as "gauge." (6) Calculated as passenger revenue divided by revenue passenger miles. Also referred to as "yield," this is the average cost paid by a paying passenger to fly one mile, which is a measure of revenue production and fares. (7) RASM (unit revenue) - Operating revenue yield per ASM, calculated as operating revenue divided by available seat miles. Also referred to as "operating unit revenues," this is a measure of operating revenue production based on the total available seat miles flown during a particular period. (8) PRASM (Passenger unit revenue) - Passenger revenue yield per ASM, calculated as passenger revenue divided by available seat miles. Also referred to as "passenger unit revenues," this is a measure of passenger revenue production based on the total available seat miles flown during a particular period. (9) CASM (unit costs) - Operating expenses per ASM, calculated as operating expenses divided by available seat miles. Also referred to as "unit costs" or "cost per available seat mile," this is the average cost to fly an aircraft seat (empty or full) one mile, which is a measure of cost efficiencies. (10) Aircraft in the Company's fleet at period end, less Boeing 717-200s removed from service in preparation for transition out of the fleet.   Southwest Airlines Co. Return on Invested Capital (ROIC) (See Note Regarding Use of Non-GAAP Financial Measures) (in millions) (unaudited) Twelve Months Ended Twelve Months Ended June 30, 2015 June 30, 2014 Operating income, as reported $ 3,100 $ 1,766 Net impact from fuel contracts 23 49 Acquisition and integration costs 96 103 Labor ratification bonuses 64 — Litigation settlement (37) — Operating income, non-GAAP $ 3,246 $ 1,918 Net adjustment for aircraft leases (1) 117 140 Adjustment for fuel hedge premium expense (76) (78) Adjusted Operating income, non-GAAP $ 3,287 $ 1,980 Average invested capital (2) $ 11,196 $ 11,581 Equity adjustment for hedge accounting 473 (25) Adjusted average invested capital $ 11,669 $ 11,556 ROIC, pre-tax 28.2%   17.1%   (1) Net adjustment related to presumption that all aircraft in fleet are owned (i.e., the impact of eliminating aircraft rent expense and replacing with estimated depreciation expense for those same aircraft). (2) Average Invested Capital is an average of the five most recent quarter end balances of debt, net present value of aircraft leases, and equity adjusted for hedge accounting.   Southwest Airlines Co. Condensed Consolidated Balance Sheet (in millions) (unaudited) June 30, 2015 December 31, 2014 ASSETS Current assets:      Cash and cash equivalents $ 1,772 $ 1,282      Short-term investments 1,360 1,706      Accounts and other receivables 462 365      Inventories of parts and supplies, at cost 326 342      Deferred income taxes 421 477      Prepaid expenses and other current assets 255 232           Total current assets 4,596 4,404 Property and equipment, at cost:      Flight equipment 19,148 18,473      Ground property and equipment 2,972 2,853      Deposits on flight equipment purchase contracts 658 566      Assets constructed for others 745 621 23,523 22,513      Less allowance for depreciation and amortization 8,663 8,221 14,860 14,292 Goodwill 970 970 Other assets 649 534 $ 21,075 $ 20,200 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:      Accounts payable $ 1,134 $ 1,203      Accrued liabilities 1,651 1,565      Air traffic liability 3,815 2,897      Current maturities of long-term debt 276 258           Total current liabilities 6,876 5,923 Long-term debt less current maturities 2,411 2,434 Deferred income taxes 3,290 3,259 Construction obligation 632 554 Other noncurrent liabilities 708 1,255 Stockholders' equity:      Common stock 808 808      Capital in excess of par value 1,319 1,315      Retained earnings 8,387 7,416      Accumulated other comprehensive loss (664) (738)      Treasury stock, at cost (2,692) (2,026)           Total stockholders' equity 7,158 6,775 $ 21,075 $ 20,200   Southwest Airlines Co. Condensed Consolidated Statement of Cash Flows (in millions) (unaudited) Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 CASH FLOWS FROM OPERATING ACTIVITIES:      Net income $ 608 $ 465 $ 1,061 $ 617      Adjustments to reconcile net income to cash provided by (used in) operating activities:      Depreciation and amortization 250 228 494 449      Unrealized/realized (gain) loss on fuel derivative instruments 74 (7) 85 (67)      Deferred income taxes 23 (11) 43 81      Changes in certain assets and liabilities:           Accounts and other receivables 41 10 (90) (61)           Other assets (7) (21) 6 (14)           Accounts payable and accrued liabilities (134) 424 43 448           Air traffic liability 201 153 918 914           Cash collateral received from (provided to) derivative counterparties (377) 95 (394) 106           Other, net (52) 2 (87) (15)      Net cash provided by operating activities 627 1,338 2,079 2,458 CASH FLOWS FROM INVESTING ACTIVITIES:      Capital expenditures (428) (481) (1,001) (876)      Assets constructed for others (22) (19) (44) (31)      Purchases of short-term investments (562) (1,159) (877) (1,929)      Proceeds from sales of short-term and other investments 614 803 1,223 1,622      Other, net (9) (1) (9) (1)      Net cash used in investing activities (407) (857) (708) (1,215) CASH FLOWS FROM FINANCING ACTIVITIES:      Proceeds from Employee stock plans 8 25 21 73      Proceeds from termination of interest rate derivative instruments — — 12 —      Reimbursement for assets constructed for others 3 — 5 —      Payments of long-term debt and capital lease obligations (40) (73) (92) (119)      Payments of cash dividends (50) (42) (131) (97)      Repayment of construction obligation (3) (2) (5) (5)      Repurchase of common stock (380) (240) (680) (555)      Other, net (11) (8) (11) (13)      Net cash used in financing activities (473) (340) (881) (716) NET CHANGE IN CASH AND CASH EQUIVALENTS (253) 141 490 527 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,025 1,741 1,282 1,355 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,772 $ 1,882 $ 1,772 $ 1,882   Southwest Airlines Co. Fuel Derivative Contracts As of July 20, 2015 Estimated economic jet fuel price per gallon, including taxes Average Brent Crude Oil  price per barrel 3Q 2015 (2) Full Year 2015 (2) $40 $2.00 - $2.05 $1.95 - $2.00 $50 $2.10 - $2.15 $2.05 - $2.10 Current Market (1) $2.15 - $2.20 $2.10 - $2.15 $70 $2.40 - $2.45 $2.20 - $2.25 $80 $2.55 - $2.60 $2.30 - $2.35 Period Average percent of estimated fuel consumption covered by fuel derivative contracts at varying WTI/Brent Crude Oil, Heating Oil, and Gulf Coast Jet Fuel-equivalent price levels Third quarter 2015 Approx. 65% Full Year 2015 Approx. 30% 2016 Approx. 40% 2017 Approx. 40% 2018 (3) — (1) Brent crude oil average market price as of July 20, 2015, was approximately $57 per barrel for third quarter 2015 and $59 per barrel for full year 2015. (2) The economic fuel price per gallon sensitivities provided assume the relationship between Brent crude oil and refined products based on market prices as of July 20, 2015. (3) In response to the precipitous decline in oil and jet fuel prices during the second half of 2014, the Company took action to offset its 2018 fuel derivative portfolio and remains effectively unhedged for 2018 at current price levels. While the Company still holds derivative contracts as of July 20, 2015, that will settle during 2018, the losses associated with those contracts are locked in.   Southwest Airlines Co. 737 Delivery Schedule As of July 20, 2015 The Boeing Company The Boeing Company 737 NG 737 MAX -700 Firm Orders -800 Firm Orders Options Additional  -700s -7 Firm Orders -8 Firm Orders Options Total 2015 — 19 — 21 — — — 40 (3) 2016 — 31 — 13 — — — 44 2017 15 — 12 14 — 14 — 55 2018 10 — 12 4 — 13 — 39 2019 — — — — 15 10 — 25 2020 — — — — 14 22 — 36 2021 — — — — 1 33 18 52 2022 — — — — — 30 19 49 2023 — — — — — 24 23 47 2024 — — — — — 24 23 47 2025 — — — — — — 36 36 2026 — — — — — — 36 36 2027 — — — — — — 36 36 25 (1) 50 24 52 30 170 (2) 191 542 (1) The Company has flexibility to substitute 737-800s in lieu of 737-700 firm orders. (2) The Company has flexibility to substitute MAX 7 in lieu of MAX 8 firm orders beginning in 2019. (3) Includes 13 737-800s and 13 737-700s delivered as of July 20, 2015.   NOTE REGARDING USE OF NON-GAAP FINANCIAL MEASURES The Company's unaudited consolidated financial statements are prepared in accordance with GAAP. These GAAP financial statements include (i) unrealized non-cash adjustments and reclassifications, which can be significant, as a result of accounting requirements and elections made under accounting pronouncements relating to derivative instruments and hedging and (ii) other charges the Company believes are not indicative of its ongoing operational performance. As a result, the Company also provides financial information in this release that was not prepared in accordance with GAAP and should not be considered as an alternative to the information prepared in accordance with GAAP. The Company provides supplemental non-GAAP financial information, including results that it refers to as "economic," which the Company's management utilizes to evaluate its ongoing financial performance and the Company believes provides greater transparency to investors as supplemental information to its GAAP results. The Company's economic financial results differ from GAAP results in that they only include the actual cash settlements from fuel hedge contracts--all reflected within Fuel and oil expense in the period of settlement. Thus, Fuel and oil expense on an economic basis reflects the Company's actual net cash outlays for fuel during the applicable period, inclusive of settled fuel derivative contracts. Any net premium costs paid related to option contracts are reflected as a component of Other (gains) losses, net, for both GAAP and non-GAAP (including economic) purposes in the period of contract settlement. The Company believes these economic results provide a better measure of the impact of the Company's fuel hedges on its operating performance and liquidity since they exclude the unrealized, non-cash adjustments and reclassifications that are recorded in GAAP results in accordance with accounting guidance relating to derivative instruments, and they reflect all cash settlements related to fuel derivative contracts within Fuel and oil expense. This enables the Company's management, as well as investors, to consistently assess the Company's operating performance on a year-over-year or quarter-over-quarter basis after considering all efforts in place to manage fuel expense. However, because these measures are not determined in accordance with GAAP, such measures are susceptible to varying calculations and not all companies calculate the measures in the same manner. As a result, the aforementioned measures, as presented, may not be directly comparable to similarly titled measures presented by other companies. Further information on (i) the Company's fuel hedging program, (ii) the requirements of accounting for derivative instruments, and (iii) the causes of hedge ineffectiveness and/or mark-to-market gains or losses from derivative instruments is included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014. In addition to its "economic" financial measures, as defined above, the Company has also provided other non-GAAP financial measures, including results that it refers to as "excluding special items," as a result of items that the Company believes are not indicative of its ongoing operations. These include expenses associated with the Company's acquisition and integration of AirTran, collective bargaining ratification bonuses for certain workgroups, and a gain resulting from a litigation settlement received in January 2015. The Company believes that evaluation of its financial performance can be enhanced by a presentation of results that exclude the impact of these items in order to evaluate the results on a comparative basis with results in prior periods that do not include such items and as a basis for evaluating operating results in future periods. As a result of the Company's acquisition of AirTran, which closed on May 2, 2011, the Company has incurred substantial charges associated with integration of the two companies. Given that the AirTran integration process has been effectively completed, the Company does not anticipate significant future integration expenditure requirements, but may incur smaller incremental costs associated primarily with the continuing conversion and sublease of the Boeing 717 fleet throughout 2015. While the Company cannot predict the exact timing or amounts of such charges, it does expect to treat the charges as special items in its future presentation of non-GAAP results. The Company has also provided free cash flow and ROIC, which are non-GAAP financial measures. The Company believes free cash flow is a meaningful measure because it demonstrates the Company's ability to service its debt, pay dividends and make investments to enhance Shareholder value. Although free cash flow is commonly used as a measure of liquidity, definitions of free cash flow may differ; therefore, the Company is providing an explanation of its calculation for free cash flow. For the three months ended June 30, 2015, the Company generated $180 million in free cash flow, calculated as operating cash flows of $627 million less capital expenditures of $428 million less assets constructed for others of $22 million plus reimbursements for assets constructed for others of $3 million. For the six months ended June 30, 2015, the Company generated $1,039 million in free cash flow, calculated as operating cash flows of $2,079 million less capital expenditures of $1,001 million less assets constructed for others of $44 million plus reimbursements for assets constructed for others of $5 million. The Company believes ROIC is a meaningful measure because it quantifies how well the Company generates operating income relative to the capital it has invested in its business. Although ROIC is commonly used as a measure of capital efficiency, definitions of ROIC may differ; therefore, the Company is providing an explanation of its calculation for ROIC in the accompanying reconciliation tables to the press release (See Return on Invested Capital).   SOURCE Southwest Airlines ... View more

  Southwest Airlines Co. (NYSE: LUV) invites you to listen to a live webcast of its second quarter 2015 financial results.  Details are as follows:   When: Thursday, July 23, 2015 at 12:30 PM Eastern Time Who: Gary Kelly, Chairman of the Board, President and Chief Executive Officer Tammy Romo, Senior Vice President Finance and Chief Financial Officer Web Address: http://southwest.investorroom.com/ To access the live audio webcast, click on the link above, or go to www.southwest.com and click on "Investor Relations" under the "About Southwest" menu at the bottom of the page.  Upon completion of the live webcast, a replay will be available in the Investor Relations Events Calendar at http://southwest.investorroom.com/events, under Past Events.       SOURCE Southwest Airlines Co. ... View more