LUV - Earnings call transcript Q4 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day ladies and gentlemen, welcome to the Southwest Airlines Fourth Quarter and Annual 2018 Conference Call. My name is Greg, and I will be moderating today's call. This call is being recorded and a replay will be available on southwest.com in the Investor Relations section. At this time, I'd like to turn the call over to Mr. Ryan Martinez, Managing Director of Investor Relations. sir. ahead, go Please

Ryan Martinez

and Greg, welcome, you, everyone. Thank

results Romo, today, the Board me Van members and Ven, and projections. of we and leadership and our that to the have company's of cause expectations and A today our of And Chairman de on our materially our current Tammy will results, current we'll Officer; Operating references be Please our our based Kelly, exclude Chief Vice and actual include other Mike President different CFO from also Gary those are special President; items. forward-looking Joining to could variety Executive team. statements CEO; note senior which Nealon, factors Tom expectations. comments intent, non-GAAP make

forward-looking reconciliations GAAP, and more So of Relations of regarding for visit please southwest.com. information to section Investor the non-GAAP statements

want leasing we began started, our update will mid-month. would December this an Before the providing around March, discontinue of planned I month traffic June, updates year on of year, we quarter be each typically last for investor we practice the to XXXX. Beginning last statistics, however, investor month the will September in quarterly and cadence a provide get and we to continue update that

that I over So call with intro, will Gary. to the turn

Gary Kelly

a earnings but very and year outstanding important XXXX. exceptional set a resilience -- did Southwest for they you, fourth way a to ought challenging extraordinary joining their The are close all their job everyone earnings us very well thanks fortitude. grateful in they an record to what an and and be call. were They our and people. for Thank quarter banner have an and Ryan up us year. very, for showed They XXXX of really the to I'm outstanding very

World It is first huge celebration the acquaintances Herb a family around beloved really Herb's and of that than made a us. in growing company it in course debt world of huge is loss proud. Kelleher. to more Airlines a of keep Southwest strong It is at loss bittersweet; this history keep report for radically Herb Our someway. without without he a for and is doubt touched our and and to earnings owes gratitude we inspired friends the Southwest better ever how our countless for are he and him make huge it

all of cash, look any and hand the a than record you had underscore And was to I are cash out. flow, Tom other number we sheet the in despite talk want about I year, thorough end minute. year strong won't financial jet higher recap so leverage XXXX further think and Tammy XXXX, going low just set it I I'll of everybody go So the shutdown to X% fuel on a government Mike I a on talk a about repeat to and give to finish. XXXX; record superb almost challenges record the all Despite will we a prices. cash records, Tammy, that and balance

good. tuned line in October; XXXX. anything have XXXX. January, outlook new during stellar I come industry capabilities as revenue for It's great We were for in to rolled am think year. remains more have first enhanced a prices, back got strong you supported construction start barring project leading of to outlook year We're X% in and enhancements details all our the expected year. I significantly on and like planned that Based also We've traffic, bags. committed and X%. strong current our about for not revenue this talking we yields forecast, unit under previously revenue told no, under in the October. quite growth superb on for Stay a as cost off our in the growth later out And capacity for said excess fuel revenue year solid I on management by quarter year unforeseen just promised we Got unit charging on we is

reasonable hedge at We dramatic fuel a have exposure built $XXX a for barrel, have terrific it XXXX XX% zero at level. But is with cost as that below we'll very protection a say protection put and dramatic well. that

items need be denominator X.X% ex-fuel when X% miss range. to cost important category is to and Our the unforeseen the will below to target is that And and capacity our range, the the it. hear comes here unit costs. If the because that we only because year outlook do we in we're for caveat it is it

couple As those. said a in front half for over will Tammy of loaded is go the we release, reasons, x CASM

The which is cost, half we next terms flattish bodes was in an get aberration bordering I'll performance into first year and on aberration. it's my to -- really and XXXX in of good second half as is a well cost XXXX. an Kelleher good an friend a that Herb the what it's anomaly stellar cop on call

about back cost us. uncharacteristic our for it's in October obviously regarding So warning

early a indications sensible that had a and will than and job at arriving for We simply committing that initiatives for leaders we thanks and to to efficiencies. series were previously further Our budget great expecting. of shared a doing higher coming been our drive in much XXXX

to going a for to been able X% per to and to famous growth to we'll also but our XXXX one than costs control for improve driven by X% years. airline of I to to for benefits goal efficient inflation priority -- number that's It's it to period important that our X% except is the to in add that is our our controlling our do everyone long several per is that that reasons and largely strive x out next that by or less that familiar don't not operational X% any I being annum. control inflation we've for wage say false. with. event control a to absolutely customer Southwest change performance We've the for over costs delivery. made fuel that suggestions and of a annum service quickly low unit here also time expect and cost some expect are of our our want cost number they're forward But course, been we Of

So we categories. -- to move backwards don't we don't with want those

Over XX our past improvement the our generating remarkable in in dramatic improvement along seen with consumption years, we've a efficiency. a capabilities fuel revenue

than we've returns seen the Over obviously off. in history five capital that more years, and validates best on invested have our the our paid investments it's last

as year. XXXX is bottom-line phenomenal a shaped So up

continues. sum word obvious a impact will that I So also maddening. can is have as what if in predict for the it of state the government And will which I'll is here up one it it shutdown, no

it could travel. slop and harm is bullish that already needs penalties So of on the all and you incurring. contain shared assume or do could and tell everyone strong. that I damage keep I that the our this comments find to that everything notice or trends of just guard But, continue and will the harm current we can we're air shutdown finances work we we at the What to a that to abate some through we on least be this that economy way can

me quick So it overview, Mr. let to with Nealon. Tom over turn that

Tom Nealon

very Okay. Well, hear urban used us. a you fourth very, tell good. I'm we gear, going everyone had had to you, quarter, Tammy few in Very Thank joining a you Gary. we just moments. from you strong for Thank will

say the performance at strong was and upper we the very Our and in our and the our that our family of beat way cost also was family. Southwest family. very we It a We I guidance and came are have a very strong. entire to is guidance revenue do performance by end

of and work I'm I that every appreciate You each for put day. one all made you all hard you thankful it in happen. very the

and are So we seeing throughout solid into we demand fact continue the momentum quarter also booking to passenger yield the fourth see quarter continue in curve. first

I first a think or half set government continuation a gearing the any over for the to very performance. barring environment of changes well we strong major protracted first do, RASM up shutdowns are quarter and that in macro

record said by year-over-year and in passenger revenues performances and strong both quarter driven is the up terms which October I comps. year-over-year billion was call, revenues $X.X a We revenues. other this was in clean X.X% operating As in had QX of of

down yields increased solid was passenger year-over-year, while which for booking quarter factor curve X.X% corporate performance. well holiday X.X load strength half pretty Our was in we our as expectations, our saw much in, including and business in across as the the right strength close trends stable

reaffirmed a consistent way one and our performance our And strength average X%. our X% this up consistent gave the regions yield our guidance RASM again near was range was again that across healthy plus all the was quarter October in fares fourth quarter Our X.X% which upper for of the in with and we and of and December. X.X% guidance of produced up end is year-over-year, were original

I keep capacity it's XXXX. noting was also overlapped increase this we think RASM worth in performance comp and in mind X.X% plus in a a X% that also

that's performance. think strong I So pretty

our as day what operating discussed by X% late also shoulder continued and scheduled is year-over-year the Our eliminating consistent was is flying. on down we prior early very QX shoulder we way in which our reducing calls very flying

way and of to was million $XX guidance the system $XX this $XX of quarter. new range higher which the res in Our capabilities yield our in to end performance above a the benefit contributed quarter, roughly million nice contributed EBIT our for million

and revenue that the of And the we'll it it a the well. our enhance very performance of it analysts million So and continue to pleased with going adopted res XXXX, EBIT puts pleased our which leverage embraced and for is this forward bit as we in are $XXX ahead new how have system of fully plan. with capabilities system, we're benefits really and

to business. earnings mentioned later say but quarter, to be in our our have service overall ending are release, pleased with in that we I really City Mexico will international we the As we

they international Although percent about capacity, our are markets X% our small of were QX our fact in decretive results. to RASM near

to that the is year fact our develop international outpaced destinations are saw sync Hawaii in load performance strong all in with very the and we said due nice RASM these in Our up capacity very beach way the factors top by the markets RASM the and add very very improvement international that year-over-year also quarter. markets nicely to is to the additional of any plans but international this and our plan. performance new were mainly have almost we're pretty Having was X% much an and increase we The RASM of any Mexico our international that, domestic pleased. in market, don't continuing

QX slightly not digits pricing variable is for QX, introduced of Our you expectations. our boarding recall revenues might right again were we in bird line performing performed both if late were And and year-over-year strong as double early products year-over-year ahead the Rewards this grew well also strong in up an this ancillary our saw product. our partner revenue Business to performer continues Rapid in real as way double And credit and Program the by already Rewards Rapid the in across Program again metrics digits strength all a we our co-branded of is base. quarter. card and strong be

strong card seeing new acquisitions we're passenger that Rapid outpaced in credit numbers, acquisitions So new ramp Award growth.

and on high card rates. You're the also seeing strong spending retention very

this is a So program. healthy very

So our still us well. runway Rapid of is growth. of perform a And Awards continues program industry extremely for in leading continued there front to lot

to the me now quarter. shift let So first

year-over-year. range on of yield the RASM QX heard expect to trends X% as you've already our X% increase based bookings current we and to in do So

We are corporate trends is our including seeing RASM base step bookings, in strength largely our business close-in this trend up to in a due travel. strengthen in year-over-year strength and

these of performance several said to there strong As ago do I Rapid addition to moment the are from factors just real quickly. But want a Awards. things, just mention I in

million holiday the about as QX know shift. is calendar is shift, to from will a on be $XX but QX. we it revenue you First Easter This shifting fronts, a

in keep mind our have that new benefit Second, last of any QX reservation we in didn't year system.

about a last is, until solid. expecting benefit As we in year-over-year you first line begin QX roll out X.X The are that's to a bottom pretty year. didn't quarter the this recall, RASM

the this and really quarter Third, last RASM by driven we had year a first in X.X headwind several was things.

environment suboptimal First, spring in are schedule, which shift. calendar talking flight the fair being we interested the competitive The done break and about.

the QX this those tailwind this see point So those year. none we year of things in repeat of and X.X

XXXX. wide you late which to a system a November we know, fare implement also be increase As throughout today expect in benefit we

to want now schedule do I is So mind our keep in optimized.

the year any strength at ago. were close we And and $XX Our environment is fleet prepared the to contracts. have relatively have is growing. revenues and impact eye we RASM a do that keep than $XX travel guidance. QX mind strong capabilities in impact compete are like shutdown we small We on in revenue thus and tied did piece million into everyone, it's of is now full to negative that I business and we million a to are currently finally, our not important our though we better estimate that before January management very built government far think keeping government a to just of

the exposure low want So perhaps our I this. and but a very for we're quarter to is others keeping just second to close relatively on turn still a compared to meaningful do moment. eye

on on prior and a the as year We here year-over-year expecting experienced. well we are as current as based well that healthy as RASM headwinds performance the trends

drove QX year RASM headwind point really As and a reminder, things X we this. had in two a last

suboptimal a we following point enhancements. Both point are behind and system we XXXX. of for issues RASM in And year-over-year RASM that those tailwind see quarter schedule was X our this res point. as had benefit should a us the from and also That a Flight X second QX second, was First a again. impact see we

So to wrap up. it

we pleased revenue We trends this will very X%. we're is goal very start we the in XXXX. And our of seeing clear, as year are grow excess with RASM

the Now, we a here to start first great are in off quarter.

that, with I'll to it Mr. over de Ven. So Michael? turn Van

Mike Van de Ven

the fact, X with had the over a industry finished point performance fourth third. DoT X of criteria know fourth of but you addition in in on out have we'd scheduled and that point that that We Hawaiian time point, seventh and third the time design. XXXX. we a was really exclude of of performance majority our an importantly, be and added The to a improvement lift were to the it course was We that if on Tom. second improvement of optimization the in for year and about turn And for, performance basis, Thanks, And block with there of time in on our tool a the time the over you the been But own the half XX.X% was into that an year. of allows than place quarters. and to the that OTP in improved turn year what industry. would half X did still and having our more any lower and sixth we at improvement without block showed planned significant times. relative the And investments first in industry and invested less look additional operational have Southwest But performance second point on-time our there in adjusted respect than we if quarters. last the in gauge performance you we anyone else

So a targets. the being while of it's terms reliability us in performance, to near the fund productivity, top asset of really very industry effective way for good cost our maintaining

million We that were of a flight, the for handling And XXXX. second. XX.X% bag them XX.X%. bags put they as airplanes on to year to Turning tagged. rounded we Last on delivered over number XXX

'XX, consistent very performance in history. So and best We're with handling our tools. doing paper those the processing in all primary and as and of year our two tracking bag and that 'XX are performances pencil

additional improved and the course any on bag also flight XXXX, time be to an in only time scanning blocks not going building investments. of is without return automation our give improve for that that subsequent again we're block efficiency the And us will performance in So investing but procedures. handling,

to identify we've that customer customers ratio difference summits to throughout last lowest focus hospitality go last for year. the industry last and in things recognize efforts complaint we from the a the to bad they information several because the previous DoT for they are apologize the We've pushed those to so perhaps or down have are our and our can in stations experience. our and the hospitality year And out want people XX% we that certainly supplemental on year. We complaints continue making where XXXX hosted were

operational second, in the a primary that authorization. to term near is focus just getting Turning for ETOPS a ETOPS

flies Although execute to and procedures. shutdown are a ends, our validation we extensive the and total standstill. operational our range government But left demonstrate navigation that at a have tabletop we long ability until our

incorporate with use connectivity the also recover some NOC operations. productivity with early new improved system eliminate from implement going our provide operations. Support associated inefficient in and our advanced opportunities make streamline have We're And of And Now the operational costs Otherwise, of our a expanded been in new safety there within doesn't and other of running fans more Decision our I technology regular the the If turning crewing work, we're heard personnel fall planning maintenance bill. that additional XXXX is have week, our while a have do we the have late in crews little in activity to analytics we either Technologies to to first or likely they you thus second that it to capabilities, efforts FAA chance We the may to can have beginning a and return possibly to certification plan systems overhead further. XXXX. the do in XXXX. we be work and some to opportunities better to with a will think more specific current definition that And to have and predictive authorized enabling along that investments or continue initiatives system. but our quarter within on enhancements. some ends bit in service We shutdown to to focused several it's daily processes of quarter. it reasonable XXXX to limited substantial

on The the right XXXX. that over close Gary into to to footing to with operations us as metrics it to And solid Tammy time move be. out, turn Romo. brief And we just operational need gives are have and our on Tom I will more opportunities where they that So very update, cost think I focus are that mentioned.

Tammy Romo

everyone. very Thank year closed I'm pleased also the our Right. Mike, and and quarter. you, hello how strong fourth people with out

performance half the story. truly XXXX was Our second

top display we year. into record was results Tom great and fourth the quarter and performance morning despite We overcame saw $X.XX challenges people relief fourth we as full the half to last December, which hedged spirit outstanding your year-over-year through, of in per a year in solid produce took fourth cost on On see coming year quarter the momentum this we great had some back reported in revenue quarter Our you our have full of performance they at higher in range. lower our mid-December prices. fuel fuel guidance crude of did of gallon coming the prices price resulted this end

us market half add our in price crude prices an to XXXX lowest $XX also with our for However, position fuel the barrel opportunity provided per well range. as as in spot to hedge December XXXX Brent first trading the

for a first and in We are roughly XX% half XX% of half the with XXXX hedged the to year protection year. now XX% this XX% hedged second in

are hedged. XX% XXXX, now For roughly we

premium for or approximately this million XXX million premium per compared with XXXX's about hedging $X.XX XX expense Our or gallon gallon. a $X.XX year of are

produces XXXX market Brent kicks hedging in $XX at more and materially current modest protection crude at equivalent. Our prices gains

oil and as Brent crude structured prices. in to continue a mix XXXX we've decline. so are that our of volatility are hedges and fully WTI price we And in mentioned should prepared well we're Now we previously see market participate a

gallon is offset the price position, $X.XX gallon hedging we to for given This $XX around and to full first range, in year prices and million $X.XX quarter we XXXX Fuel Friday annual $X.XX the with X.X% which a full XXXX, in on year-over-year expect by $X.XX our continue XXXX $X.XX in X% with in For XXXX cost retiring aircraft. cents fuel for by more fuel per expect year similar costs. story of improved And savings. Dash efficiency $X estimated in be more in gain efficient based premium to fuel the expect of improvement $X to an costs. hedging range continue the as be and our an estimated taking a going will on range $X.XX key become part price be market fuel per first and of year hedging which to premium should MAX we begin we to meaningful XXXs forward, gain quarter this X% offset our our last the

down fuel items last Excluding expectation fourth sharing, to our year and X%. our slightly of and were special profit slightly flat quarter up compared to costs than better unit

As a a unit tailwind tax due from XXXX to year-over-year XXXX's costs of bonus. quarter employee X about point fourth fourth reminder, benefited reform quarter

our line items XXXX, CASM year to right in expectations ended profit and full special X% sharing of excluding our fuel For flat with up year-over-year.

played plan. significant costs employees put to a in of XXXX And of controlling effort. profit also throughout they the to year-over-year on I'd thank weighted team year inflation into for pressure all with to the and focus the X.X% fuel unwavering We our hard completing sharing like first our our currently year like the their range role managing the X% Our half and our all CASM in this to work thank I'd cost excluding XXXX increase for year. tremendous expect to full

fuel be profit CASM year-over-year around is similar X% and XXXX, expecting XXXX, quarter. quarter to to For quarter to expected our costs year-over-year and increase first first sharing excluding x unit we're trend second our

sharing. year, costs the profit of trends expectations year-over-year fuel half cost current For excluding second and and this unit suggest flat

flying, playing And is timing in growth trends. penalty half you half point X.X alone CASM delayed and benefit our costs part Our in about is Hawaii of which without capacity quarterly big year-over-year in all our flux. a first and the of we're Hawaii has our flying first the is pressure specific a incurring x as startup cost the know, been

And first capacity mentioned ramp full unit press costs up the half respect With and X%. CASM the morning's half This of higher than growth pressure year-over-year the airport Hawaii timing fleet of was the this year. Hawaii. no our depreciation to the of our as quarter year in under-utilization of cost due as first we and contemplated in from more to half due of CASM first the guidance are underutilization of year flying lifeline, expect we a our second this of release, due x our our all the to addition, cost our ease pressure In and the maintenance to growth timing in in fleet delay X% we in technology year-over-year drivers and this inflation addition the largest should spend.

on said we last advantage. call, top priority. efforts our we as our As controlling protect our our rigorous costs is we'll contain And and have to continue costs a competitive always

is is rate discussions, Our and cost our credits. below in profit for came year-over-year long-term the tax primary on goal And to up fuel fourth of end tax growth and sharing which believe excluding our contain wrap finally, a year costs as achievable. to of reason annual X% realization I and the XX% to quarter unit our is reasonable closer

rate billion was XX.X%. revolver XXXX XXXX. cash approximately our our to rate welcome short-term year that investments available. with note, free lower the our in operating contributor X certainly And record We ended be estimate cash of X.X and billion and fully flow performance tax on to continue a the tax We with ample to

continue we invested which XXXX. into plans have the Our billion lower our XXXX, invest billion the XXXX, ended remains we X manageable similar spending very In X.X business, spending In and level of expect balance we airline. we range as and timing. a the than to mostly X.X sheet billion our in guidance for obligations billion future due strong approximately to CapEx of of debt capital X and to

maintenance which commercial side. and reservation Baltimore. this Boeing, our side significant operations the We particularly we underway the XX investments including And as which St. deliveries are as including aircraft a investing in our LAX new of is new course, business building have is new technology at hangar And I'll of cover we system Louis. airport XX to system new aircraft have year in shortly. a we're And maintenance from

for drive plans. more as support incremental investments and cost better our help we well well as as revenue efficient term objectives to as drive to longer growth roll processes and long-term tools We expect opportunity technologies productivity out as support our employees

cash record share we to through free a XXXX dividends. flow and Our X.X repurchase returned billion shareholders was X.X billion and

shareholders. plan to we our employees to approach continue investing our providing cash the and opportunities balanced flow XXXX, in with and our free in For continue the to business to

this X. and also more This that disclosure needs. XX X MAX delivery leased XX close, aircraft. had I capacity in for year's which fleet in X total I'll MAX of previous additional is quickly for MAX our with have XXXX We leased leased replacement through currently deliveries one XX-owned target additional than had split X, plans. order XXXX and earmarked XXX ended take X book of XXXX, MAX aircraft fleet our with December is we seven you a as These fleeting into X our line MAX owned we comprised Before our XX aircrafts we X and aircraft are

improve fleet maintenance mentioned, effort, this we continue start with oldest we'll help XXXs which As our of year modernization and operational as our Dash efficiency, we reliability our burden. fuel retiring some will

of Dash XXX our resulting to end year year XX around XXXX for and approximately XXXX fleet about in of additions XX net XXX aircraft. is plan current aircraft retire this a Our

seat quarter We we XXXX continue to year capacity miles X.X% expect first available increase year-over-year more range no to our expect a increase full year-over-year. X% in than to to for and the X% XXXX,

can. published added currently flying which we schedule will as be as Hawaii is covered August early soon expected schedule and we've as excludes Our this through

schedule of or publish in Here the our we'll September. so, end week a through

this looking up expected half Excluding to for detail hold, providing XXXX some Hawaii, capacity first In Hawaii certainly able to our Hawaii once half ETOPS more represent plan uncertainty our capacity our schedules. our and in the growth reminder, capacity we're to growth of we as to is planned And process meantime a is year. capacity X.X%. XXXX with have to upload on forward we're

So it now. take we for a will time one schedule at

So again our occasion rose I employees in to thought strong. execution in and and time very challenges the despite our our closing, time XXXX, was

as low brand today as management shared Tom we our what our XXXX revenue very are committed are a healthy on recap with mentioned, ever. remain outlook. We to and starting quick as strong fare a As RASM we capabilities

focused have out XX of much plan trajectory really and inflation XXXX. path we'd our I We this our our past above this forward. feel to cost arrest year, XX second be about the on where outlook half been good In months. to for over And XXXX particular, cost like the closing plan very cost improved going despite few some

expand our and our we on margins XXXX capital. to First improve to want foremost, in returns want we and

are prices down fuel back up. protection, prices if near-term currently XXXX XXXX fuel go position improved provides oil year-over-year, for hedging more While our even and

He Greg, thoughts We live back it will invest most and to facilities continue airline. be our you business change -- Airlines and take fleet, you scalability continue of the in to become missed as world's want who our the family. our and greatly. of the to to airline future Herb and with and Herb to reached the forever. technologies march now closing, In will will investments did many for share year His on Southwest to your legacy reach questions. I growth of we best flown loved, Southwest to I'll profitable personal really turn stories that our heartfelt most us thank to personally to those now And out industry he support out and this and to most about

Operator

now our begin from ma'am. DeNardi first much question with Instructions] very [Operator you Joseph We'll Stifel. Thank

Joseph DeNardi

more regarding Thanks was Good I Gary, need from you afternoon seeing the the for that. think urgency cost offset some the time. there were everybody. revenue and you pressure to find to last quarter Hey.

you're to you changed alternatives. Can levels. x update returning I comfortable mean open think XXXX XX that you more that mindset I Thank now with more because were just has normal CASM perspective your and you then there? mentioned to maybe you.

Gary Kelly

It's we've We've telling the actually today. Yes. that you, the you plan. our Joe. up And about momentum. XXXX. Sure, used, than other than by. time truth more firmed in improved. sustained We're very We're truth you told October. excited I our wouldn't I be the honest To that don't I but remember anything gone changed has words has We've with exactly say

what our got of for initiatives. they I made about again, that. of off and the I we're must belt job admit changes during to that would commercial pleased, new in very that the that plenty keep now, team, with new our feel think forecast flow our from there. experience we we of ideas think hat's benefits good was I XXXX about have think better pipeline phenomenal and flight that desire We've encouraged very really in my And I And what under the a to so full we have XXXX. all and even terms and just did the right we

of ideas relooked XXXX the at construction that revenue in more clear The reiterate Beyond It's and initiatives the is for look that, I was what nor goes on Every we in today we commitment. to first just that contemplating XXXX. far us. October idea. as think now that have better se per contemplating time mentioned an front any that under that than new I I couple is we they that doing weren't we then I to July are a is was have as work construction All underway.

road been it very So feeling working we're other and better that I up. good got don't in the message the on and in encouraged plan our we're firmed continue think to down today XXXX. momentum opportunity a have more certainty our there's work. of It's and augment to XXXX about we different visibility project about with anything some We've people than

Joseph DeNardi

That's helpful Gary.

a you or impactful the it's increase just RASM I are that so I you the mean, things then, wait adding fare like you're about follow that revenue driver November second just first in of as in planning is, you. not Just mentioned And one ancillary somehow, to what your understand XXXX terms talk we how PRASM. quarter two should that it. that ready hear at you're ups. in doing on the for or Thank we the to to this beyond can so the quick point what Can quantify understand of initiatives like very should that?

Gary Kelly

part we to for do. I we're know for and early come we of not competitive sitting assuming new us a question want Yes. what to it's continually want revenues for straightforward. the looking little will will very on the that let Tammy your address that by that to It's question. people exactly reasons first ideas is latter -- All we're to share

for primetime. going you it's Tammy, be. the for when give tuned later to fare benefits will you're And the us stay that talk to about year component? increase That so, forecast yes, think the ready have on sometime in opportunity want more better a what will to better we

Tammy Romo

And else impact provide obviously it of it assuming traffic, all for that. all X%, morning. terms you're that's like all baked be guidance revenue equal no in but happy to on do you when kind to I'd assuming that call up then know you're to we the but as of -- your been traffic, assumptions you be depends into this in dilution assuming say and could the it Sure.

Joseph DeNardi

Thank much. you very That's helpful.

Operator

Barclays moving And Oglenski. have we Brandon on, from

Brandon Oglenski

especially as for it to booking ancillary generate what's forward Thanks guys Tom. hear you initiatives the have JetBlue strategically guess of driving talk basic the based that can I of it we and Good wait industry to pretty effectively version to is majority structure. strong. question. or XXXX? Is this these to some same difficult competitors? outlook you And the I end as about half that sounds Gary revenue guess Hey. strategically of making the goes more your pricing on of in in change mean RASM economy curve their taking afternoon everyone. rolls here the the my the to out first I

Gary Kelly

Well, this Great Tom, do question. are one will you going take to and two.

greater And after we opportunities more here about capabilities the means can asked What no. not are asked going we in see -- answer what terms over in or we're short of was we to. evolve and the business we're that's near-term. economy. our basic drive where is, time. what all think volumes pricing. efficiently they I Hopefully And time responding that I -- improve I'm the That's in

Southwest. economy to not do. fees. not we going see basic That's You're from what going charge not And we're for I bag to said, already

love opportunities brand. think unbundle we have our we and they better fact that that different We and I the don't. we're fit

to road continue to the And on now, once to market to to we it to something focus XXXX. year varying And be. our of have warriors needs stay to to travelers couple a I'd And they're right just and how in say, find a they going whatever come we're offer going have see and universe flyers Tom? so that with might list brand true a ideas. the ways long we to of value and more of need we can

Tom Nealon

done we done to I Well, think have over just would we I'll time would system ago. the have that from our able things doing all that system, reservation if things precluded were you there some Gary cowboy add old is, we prior probably that sooner, years if are think about liked SaaS that us to

you'd we makes we sense. have do foundation res for we to when the system I some have. honestly you're done the earlier. would have, it in, could us perfect would that to talk think, expect in that later Now the foundation that going year Well, of does set with really if yes, the things one we that you

so we will. Now can we

about. early we our that products to are pricing you're strong But, ancillary not when drive at kind So ancillary of bird these inconsequential other if things to the look in that's we are us variable hear thinking really that of -- going they're talking and our continue are you by thing performance. like do business, our thing the and kind those

and product So are build we we and capability upon. I'm that the really have of probably that we can there's proud

I But tuned I'll about then what talk stop, So will guess for it you stay some right? that's point, is. Day Investor

Gary Kelly

are on no not I about is competitive. evidence your the competitive, quickly staying very mean is just there point at And look results. that we

cost we the of evidence combination and best fact there's that revenues returns period. and In have

think we're very we and where up against stand all about in it anybody. our we'll brand So confident put I

Brandon Oglenski

I higher true no guess, are models, able that competition Is the returns forward we I are to margins much structure? you guys where pretty a or? are ULCC you appreciate fare from on away doubt Gary, are curve then the the booking with response facing get But to your leading. that think

Gary Kelly

ULCC overlap is our Well, gigantic.

to back just I yes. management So that about I'm say, And capabilities. I results pointing comments think enhanced the earlier our would made revenue

a position And cost, ever generating to hinted this in to new low that use ideas. going we're has is than to So you better we compete cost, pursue a Tom or technology revenue were leveraging name with it. of we're high couple

-- a So a we got strengths. of lot have we lot of

in else. States seats anybody than the more United We have

customers We than have else. more anybody

have We the flyer frequent program. best

the in the of product overall on-time terms the great baggage performance a in handling. reliability have We in

It come Nobody employees as that. in can never the want dynamite want we we the a making combination best hospitality. We package. close that the matching We I are. can't Certainly of to a have again, approach we're keep and about confident investing And terms real to strengths. ULCCs say standstill where is of and improvements.

Brandon Oglenski

Thank you.

Operator

question you. next Vernon The from will Thank Bernstein. with come David

David Vernon

year, kind maybe prioritize about whether decision the this of you markets trying quicker or if potential of want a you're a taking the ask was growth you developed sense organization's to that get decision And to than is international growth Hawaii maybe for opening on I'm international where you. to of in any you this little sense how postpone kind years avenue and time. a opportunities this of couple given to for a afternoon thought? you the wanted you're feeling for up the to bit a kind thanks still international Good getting to last look international could for I year. whether kind about in just or I just focus get for a back Hey. of the get the taking more pause

Gary Kelly

clear former about the and we've been It's that. No.

fleet, I aggressively this growing, we're a lot of beyond So year. classic and to to We've grow then, going most people airplanes the think the think of be retirement pretty overcome added that.

and year be we're a record in adding net numbers we'll XX-ish this of So at fleet XXXX.

focus. right So airplanes? to what breather XX Hawaii. now kind do saw to out with be And development. other quarter. going taking big We're we unit a do here to gave there going your needs it And Tom areas revenue allowing fourth performance a really international. expansion crowds a as in it of that question, And like little answer the in we're international we is of the good quick summary the is

would we international all grow some our But it absolutely were be that's not internationally. more augmenting adding Hawaii, opportunities flying. routes vast fine. some for have And So we to and of

think and of matter big simply an opportunity. Hawaii, of a is prioritization of it's So that I deserves that prioritization kind

David Vernon

And making a be then, about new the little into routes opportunities domestic some you That underperforming of to think bit from that more there? how maybe guys attractive. International. equipment would repurpose maybe do Like -- [indiscernible] some balance

Gary Kelly

day. that's every Well, just do you that

we're commercially help October that about back strategy route in should And if part be viable, that initiatives of only talked evolving recovery terms our customer not yes, in our also pruning. will is we is so it late cost performance. but in fact is we more our that have cost So, that And of it more flights. friendly

So kinds those we always are of doing things.

is But, to and We now. answer continue as we're obviously that one yes, the system the it prune have go that like to route as is it solutions is where right infinite But route we a very complicated are forward. we'll There are we network. inputs. aircraft as always we with our we how and absolutely the of doing

David Vernon

timing All going and whether already? of on Alaska that the when then, in ASN is just gates you would to into And quick be [indiscernible] and those kick a those follow-up one maybe -- in us the is going that LaGuardia or not right. capacity you. for from Reagan. Thank got Can give the sense

Gary Kelly

my I in. believe It's time fall, the in November period memory, You're XXXX. testing in of but it's already the going

David Vernon

utilized. gates being those are So already

Gary Kelly

place in so well. moved and really undergoing very that's makeover for adding are flights. estate moved our is we're same LaGuardia massive at the get this us serendipitous good We've facilities time to that flights to Those performing new real we've been also and

all So that's really also. going well

David Vernon

All right. Great. you. Thank

Operator

JPMorgan from on, have Moving Baker. we Jamie

Jamie Baker

good Hey, everybody. afternoon

saying other so ramp the background, year's working start service are of place the up, imply can finally sort words, related three advantage that the nonstop this is far quickly don't touched was in sort if routes originally that to constitute taking could add and delay Hawaii of cadence still of your than that half do Tammy, preparations and and expectations, more I'm as I with per possibly to up making non initial does Hawaii ETOPS obviously on know, plan. I'm on and you to question curious quarter. First your that the ETOPS In growth. when But, so this you relative

you'd So a be year. doing XX after

or second does still that you year flying quarter, the to it because the until in currently you're start the If taking delay get could plan that don't you of less time not way. end work

Gary Kelly

was that for a probably Mike. Well, better question

it from build as up So you more at opposed operational Jamie an up. coming to ramp are a commercial

Jamie Baker

presumably both, of quarter the you a have service it had fourth in you year, flying started year. were last Well, plan this of quarter place now, if the you'd in for fourth

point its quickly the come basically this at twiddling you're can As fourth government act together. get plan quarter to waiting or slips, thumbs more for offense their does ramp the down just the you n date because

Mike Van de Ven

this So Mike. Jamie, is

we ETOPS is with think of ready, up you have making our that. when an We're that equipment non-ETOPS our is trained things are all have flight. other ramp adequate taking ready, we are Hawaii, for number as ready item about ready, pilots The to procedures the up, of only our is go with terms our In ready. staff ramp sure gates we

to probably have it don't three six have that. many And tell so, constraints that over we I first And is. what we any really slow to ramp -- would after you up after is then as that the the months

Gary Kelly

And just be to philosophically, going conservative. Jamie, we're

places that's process this will We're time what don't the at talking delay with. to flying. There as what think Mike of go been that think reason people had we're a same at Mike resilient move to there is the for question. a the end at at to said. is we I just are the that and other we terms and underscore one going So I started the have same have are But a an to grand very advantage commercial get And temporary we that are earlier things, just We would airline. put in want February I have in -- locations. place willing year in of and folks be around and of scheme they're can do plenty the and we airplanes our to -- years other going we're comfortable and we of that certification is the about X, relative not duty there can purposes is for we airplanes pace

sloppy stellar we're admitted that looking nothing numbers. our that, So is it's and a FAA them All to has is is ready we that demonstrate we've our year really The thing half that program. in other at now still execute nice with and It than our a changed. the to first program. reflected Even and to approved have is, do we go. can it's

get the sharp shame of And sight that pretty we just and are to the FAA is this the line to so is getting the that anxious darn we are where their too. of to certification part with It's a really done shutdown. work

Jamie Baker

Southwest. Southwest very to it wasn't -- the secondary place thanks the competitive what's also mean was second, taking that -- think growth didn't I'm delay bit contributing constraint running factor. color markets. aware cities of with is I hubs I quite Sure, as I And you're anytime sure. that some in obviously and helpful here. insinuate it was But in a ahead to the secondary Obviously, a major is driving for sure cities, blame That's United of that

in RASM, stretch? that or larger of a outperforming assume be terms would are cities to safe year-on-year the your markets secondary that it is So

Gary Kelly

us I'm well, airline, flow know you XX XXX% Well, don't debate I our as airports. to trying don't the but a -- top of I of our point, think so customers Southwest city so know I that secondary through -- don't know I

in number we each city very example, your just secondary. to cities. those from don't both airline. fans flights. got a as are words, secondary. an say would secondary in we to as in a and Kansas them not using lot words, successful recent substantial airline City, We've certainly one San And to I years non-stop let's we've we're we're don't, of the We in They're Antonio, non-stops refer know very secondary, So other city. big go added

cities they're well know, So other as I I and could and because try to we XX. don't know smaller to the fly just what as cities top don't we we generate fact, the we've in compared locales. And volume XX got states XXXs remember in do XX -- you we we fly in avoid enough

to I away. we're we're expand the is, mean that our our net So to That will plays that's strengths. going think strengths way a to continue to not make and answer competition. strategically play better. go to used to just I continue to us in And continuing

Jamie Baker

both Thanks to questions. answers gentlemen. Strong

Operator

from on, moving have And Stanley Lalwani. we Rajeev Morgan

Rajeev Lalwani

Hi. Good afternoon, Gary.

Gary Kelly

Hi.

Rajeev Lalwani

you Gary of side. the for a questions couple CASM on

longer year, targets, of to on of First, impact is pursued get a down can of you're rate kind sort us on and Why like thoughts took And in the through walk of X%, of What you a flattish labor to kind then, maybe you the give year X% it, have run closer that costs. X.X%? going seems then this it unit just bring you of can that isn't good the term back forward, half going those mitigants longer numbers? to costs and the be labor you sort that to out sort on there secondly, to disrupt some use steps us and bit you term?

Gary Kelly

And basis. a where And that's to in will early start much a tell. will devil little initiatives details expectations little that. about kind know something all of admitted budget agreed on will one. through until But for that run exactly more told was And and in long I the a I we're in earlier, flat we to together it's was a back. our in terms have fancier annual all cost we there folks you, done -- we point your and grind. my Tammy, was you to have in confidence out of too comments to fessed period just is little talk going a Mike as to committed and And a company than that we mind And X% put more was about -- significantly be you that also a more I is But revenue think and here. it It's coming the X% want and is to anything project. of is XXXX the trimming real good efficiency. might longer expecting. in over is more very the can nice begin with a statements But don't definitely leadership bold a and to efficient What that inflation of rate let got But Well, my admit we I higher have that's job Tom fact there I before driving just admit I from you I what how run And a time. XXXX there. of but bit up these fancy. is which that was invested rate putting our to to fuel it's in we this driving

basis to So period is us our I'm bring than to expect you of proud I forward as is going now that's a long time no should an goal said lower. And that on from X% of that. more over annualized what X%,

leadership aspirational unit goal among to cost Our our flat. keep is

will you it's that there the the expectation into the XXXX. can is that want that year. you you bit, how And for assure I forecast with the of to a we are initiatives But, from our too here? got But to far color that be little cost goal to tell going so Tammy, underway early

Tammy Romo

were original when indicated to the to reason do planning call, we early we get plan. we you was is what our than obviously that And expecting scrubbing inflation on was lot normally remind it what Sure. we do were that. annual our in more all. because and talked clearly want And we submissions and now about certainly had the I'd the do on there a What the I we everybody be happy that last of to which

that I X.X% when costs combination that takeaway So we today think it you, scrubbing continued and through the guidance we range We and journey obviously, shared today. started the to important of have our fleet than point is second the we here and provided schedule we've made changes to to was we the a higher on plans some which fine also we've tweaks tune And the our in have modernization, our landed half. with there. you that

certainly airplanes to and see up the from expect earlier, some fleet mentioned we that's modernization so effort. I some we improvement as more So picked

really already and year on now on So right we're focused execution this working beyond obviously improvements XXXX.

I'll second back and that flat around we're So, again, this CASM x remind trajectory on half a the you year, is which better just year-over-year. in of

So we'll to continue our making schedule commercial efficiency tweaks balance operation opportunity. with to our our

employees improve little I pain eliminate bit, their projects daily second in year. allow the as better of the points should us And half staffing from that's more here mentioned we're Mike So currently investing opportunity efficiency our covered the and think significant processes. and in and I just operational provide a to technology to those tools help

types are in we time those our And trajectory to of we the that -- hit the just here. with of just ahead of work look that ensure we you we've we as as shared some So have that bag initiatives today. tricks

I main probably point really the Anyone want that's out. technically. So point to else

Gary Kelly

Tammy, right we want but to I -- don't know word, cost of to X.X%. X% make that sure not in the growth that XXXX happy understands unit everyone with I is am if satisfied

this. our were more wrong. to years, a it's what what for us action. had that's We you not years had expect we're And we've extrapolate So where we -- forward that Right don't research in just of is lot facing. get that's we've and but going one now certainly going should growth what plenty cost those X% we of unit be history corrective taking

Tom Nealon

we talked XXXX. about plan and about, and to plans. we work hit Tammy feel We'll Gary that So hit how

Let me way. And of XXXX guess think are starting the and from? thinking it's by efficient the we cost I talk thinking. with we're the airlines one about XXXX about world where kind beyond in we beyond the of so most and really important how are -- to start really I

on very, are -- we're this. you'll think point, and want working we that there take have this, efficient. at do But, you'd we opportunities be to on. you you I we be But working to some to very things do through I So through take us want expect

have example, an and a regular over Just every your Well, day flights your are definition day regular XXXX you we fly by do operations. operations inherently inefficient.

during So what drive in or efficiency weather to do can recovering a is. whatever the we network, right, it outage

the the example operations. So that to work network thing, but modest going adjusting an net that on, customer, just neutral the across that is tweaks like very, modestly very filter to transparent there things the to just revenue, is that whole

the we're is This out this. thinking is pruning that about we driving processes use things. is So This big inefficiency broader drive how operation. thinking the really about just not

drive efficiency XXXX, in the we how that's need, themes the And to going actually. going drive to we and XXXX are budget, So we're are bigger it. beyond we're thinking about

Gary Kelly

deployment manifesting the just Number one significant projects Number what's around a It's the and maintenance the heavier investments technology a basic more X.X%. of XXXX. and everybody couple just two, that to also aircraft very airport country. of quickly we is projects. deployment three, of depreciation X%, are aircraft seeing other And in burden driving things, from a step-up in thing remind

did that benefits XXXX through the is, lot we should investments taking time of are we into the was on question. a of move that that the So a And just in our structure that said of next our to we that lot to sure interest we one things of since these account improvement deployed. October. are saw being that cost we I for of guess flow the make let's ought

Operator

Research. that one time question We'll with take have Hunter we And Keay question. for from last Wolfe more

Hunter Keay

how these you factors, going line is Thank which if surprised time market. sale wondering wondering might to with you. me market? or different. very might you markets getting was Hawaii in BWI it compare I makes be for outlook if in a be for your you on. the was if think Hawaii RASM obviously is yield than to some Thanks in of of I given these do factor better But that low performance in high Oakland, kind load of point be can the

Gary Kelly

a profitability. a about setting a in always And to don't great We individual aside is our about had markets sort it I little talk like thoughts to of going sidestep that question. under the their a That proprietary for tradition way I'm of because maintaining a and second. comparison specific just bit

significant forecast to have been a All done have that of the of point we Hawaii in very from California strength exceptional.

flying they we will performers, we with urged perform is quickly pleasantly surprised expecting to very, develop were number of point were forecast not it island Hawaii, I'm which XXXX October inter So that going that. think and as What a very Once satisfactory when one. we and revealed initially I first when startup contemplate were at like we typical thinking looked be pleasantly we surprised well. we that how to were in were we that,

more and with both And and well. inter think our the on business so the competitive And forecasting I quickly. that. viability the then, that markets else of and we forecast have the to islands, very good very mainland island on our and feel the customers aspects about that the to experience based We and our of both would understanding dynamics the much cautious. choice we have been Or up ramp very, judgment made wouldn't

money is any the is and exposure you our in mouth putting our we're event So know where limited. as

to going of backhanded capacity. it. have something to Hawaii bullish I that's a that it a sort way viable think schedule. way. We're I very a intend our point up Tom that don't saying be of builds like or of But we're about

we're do continually update while distance. to been line bottom has of forecast, which a huge are we're account have do We And markets that huge a get you comps is Southwest who going have the of unchanged. Hawaii confident this that we to opportunity other when destination about into board. you fans judgment comparable to our is will of take well our lot is the on customers and

Hunter Keay

Gary. you for in quick real Just

call, interesting it in Who talking You at it the said jumped look out were of to? you out beginning the was me.

Gary Kelly

he remember the listening. but he It's our lose had I meet everybody impact can't an been absolutely like feels get you opportunity is and them ever And for experience And on know people inspired. Airlines profound. they Everybody Southwest are him. Herb. is to to they company like a him, people you airplane feels like on that had whether Whoever emotional the someone loves and

And of no Admired work it's from heart. this is about the airline just ones the they on Most and in there's who this. And on is company that no there they're and Fortune it and world terms comes the people that inspired on and ever win the and and the So in customers, like these just making are ones as win as all our us. who they're stopping

whoever way look better get in to So wants our out.

Hunter Keay

very I it. Thank appreciate got much. you. you I

Ryan Martinez

a Thank that's And you additional concludes a think all I call joining there. please and have great today. any for to if up us of questions. the analyst me That ring. our you way questions thank you wrap for course give

Operator

President now Ms. media Linda Vice And ladies Officer. call. and to Rutherford, with introduce of gentlemen, like Senior I'd portion Chief will and our first we Communications today's begin

Linda Rutherford

Thank welcome you, our on Sider question. Wall just I Greg Greg question members how [Operator refreshing you of Instructions]. first take tee to the and Alison portion. Street up Q&A media will for We'll them jump with right a they mind like I don't if Absolutely into ma'am call the can to our from the Journal. today.

Alison Sider

the taking question. for Thanks Hi.

of high be becoming the for air? any shutdown it's if shutdown a sense You you're level. to a for in I us of talked delays the airports able wondering a whether -- lot of was safety, whether kinds about impact or at in the you problem operations either the a might give seeing

Gary Kelly

Mike answer pretty release Tammy chance estimate. travel. the for that have in that we're to I'd Alison. too. to like we seen the Ryan I and dollar thanks that But bottom press we've and comfortable no. specific And think a line that's impact put that's to the something that can is, government Well,

will word be the use it safe. safety. is safe and You It

an risk the safe airport things traffic that an down order That's environment. slow both a operating think as perspective well to as is I in perspective. from retain air

feel to offer TSA their like And So I are I running. doing employees. proud I FAA keeping am They and this. to thanks whole think our endure a they for have phenomenal should job. so our airlines them country of shouldn't the

flight tied the the those intimately answer. year. beyond goes government. single one and been is every it is with what superb the so single customer just things. The and they of every But But that that touches in that business the we federal through has federal beginning goes Mike airport like to have since Our government actually far operation you touch would

Mike Van de Ven

did with TSA can things high or keep think agree It's whether volume points, it's the staffing of will whether said no or he the I you that. traffic like the what what it air controllers or pace I all be matter safe. activity just with all not different

that longer that taxiing that -- And a the times airplanes. times maybe are checkpoints so little waiting there lengthen, that longer your maybe risks bit that I things in-flight longer had to it we between may more at goes do have wait may trial times change

think are of that the to be kinds ought about. I those we things So

Gary Kelly

clear, saying be again, And not also we're that. to

performance this it year operation year Mike's was than so a In fact, better far. the is ago on-time

things So on just far are knock going wood fine. so

Well, not made good they right not the conjecture. about impact has and now. wouldn't I hire is if are this this allowed any worried just thing a FAA anybody do go did the So point on. they to all things feel are those what But we're can't that about train they're because to the good they anybody. all is allowed

control And And years time proficiency develop so they harmful. keeping a already traffic have air and positions this of takes filled. hard it was to their experience

other will way, are left It jobs they it some is travel. it but know don't important will they're what needs we harm, essential I all industries, essential. just that be The economy. know on road absurd, air the not there. or they're notion be end. are is -- impacts these harm wouldn't point somehow. there'll some at it But absolutely And to harm if down It So as the some is, this crazy.

to wood that's federal than And knock everything the real the tribute so is but later, it right on well government employees. remarkably now sooner and just a running

Alison Sider

your sort concerns about any pilots from you of or system? of worries any flight crew, hearing attendants, you the the coming they from with to Are are robustness

Gary Kelly

never I've any heard one heard Tammy, Tom, Never no. Mike, one.

there I will think and will you and is they're bet you which me, anybody you to that working heard in who the hard. from I bet would are talk thing that you. to same talk you're people fact, to welcome I hear

I should I work their think hard anybody so anytime them and you you I for travel. see thank when

Alison Sider

do. will Thanks. We

Operator

Rucinski have we with on, Moving Reuters. Tracy

Tracy Rucinski

reaching is to force the shutdown, Is agreement far industry aren't on do an Hi, to signs an deadlock? Washington any or there. the doing so the to airline anything can Again there there reopen. that of end

Gary Kelly

short is the think I answer no.

has And industry is a and monopoly. this with and done. aligned and to What the that not this. absent sit the be expect, communicated be As can going you we're can about -- we're to The the would be leadership continuing the we do that. with But other to government. many in industries find everything that this to simply in else this ways here so dealing risk federal mitigate victims done of can harm end

this to to So to choice to services. it way, not it our our work we else does. go and shouldn't security don't available It's services have us just provide someone but traffic the or

cool in do no the our our to to and what. this here and have through very to And slop. year that just work XXXX we to best meantime, have can we're need attend matter So as we business heads going we'll good determined we're best a in

Tracy Rucinski

Thanks. And timing the question about again just of a Hawaii. minor

one due unit were quarter there quarter. additional If unforeseen end up first second costs a start it's cost your the rolling to chunk up of from You Will an be said costs over does Hawaii. that that into impact?

Tammy Romo

This second impact. will cost continues a And That is absolutely quarter duration continued into obviously, depends Tammy. there. on the the be Yes. Yes. it there

Gary Kelly

into your But pretty that's factored much --

Tammy Romo

all That's guidance. our in

Gary Kelly

That's all in.

Tracy Rucinski

Okay. Thank you.

Operator

we next And will hear from we FlightGlobal Yeo. have Ghim-Lay

Ghim-Lay Yeo

to get launched about start. soon Thanks Hawaii Hawaii. FAA approvals guys. at no, probably that [indiscernible] are actually up actually know start a all, into follow services a plan in not exactly you my can the I to for begin that Hi, service. shifted taking question. have afterwards you you Thailand Hawaii timeline after How when sure flying I flying has you shortly

Gary Kelly

about Mike, you that. want talk to

Mike Van de Ven

Yes.

we before of to a leaving to get into inter Hawaii months final So launch for the just entire And into a and publicly we island focused after couple on the flying. period flying we're up of of Hawaii, mainland when probably service island start the not going be the first to then, time.

Gary Kelly

was posed. of But be was the scheduled. Mike is, the very our scenarios and the we from assuming had scheduled, be we that for our planned, month we and that task Mike there. what of this the will All different that get December February. selling was I approval schedule all that program of our program by planned everything that Mike I once for to validate sometime be was accomplishment. you was huge could got if we our started think a They very And dates we would week. had proud end FAA a they All handle and passed the and the thankful had that we to hard left scheduled, FAA. would during flying next folks January selling to FAA had to that knew They had in that led would worked that

is now So going he this. roll to

in rolls. be then X, So and we get you would be it again, allow following certificate sell, February if can month. to I the our able we month FAA just we think with the And roughly and started, a then let's get say flying and would

with So until time task to that need get we're from roughly that the time going we back that's on of the that amount we fly.

that's Anyway around time idea. he monthly cadence you from working depend, for still it's be it's the flight Mike time that crews FAA six to flying. so some say we give then it starts so to has somewhere his weeks. I that to it's schedules or but that would the And and publish homie finish is to it. -- should that to on rough a So because the no will eight with somewhere would this

path It's started quickly be I with to get that think we We the be February we But a could too late be units, it's in going February. possible in if flying flying one we start don't March. to March. could see for in April. FAA but don't part is it we flying

of So rough kind that's a road.

Mike Van de Ven

So mainland it in launch location service we play out there island options a that is other will second launch mainline Hawaii locations will as out then have connect service the the one to inter service have location, get and through what flying we and and to we mainline with to that first I more with on more and that's follow than to just the flying.

Ghim-Lay Yeo

see there question to implements Sure. And I you more city. any and was situation. airport Are going corporate mostly what's bit than has Mexican in mind wider about a separate the little able with been Mexican it have self a on been because materialize, the from city

Gary Kelly

now. Right

and for capacity. right and of deploying City, on destinations us primarily The I'd certainly of are in these countries showing points service leisure just to is support marketing foreign in be Mexico on are back of working It's Mexico for strong we all and like in what days. now currency have foreign capabilities market be of we team better in and a focus improvement. alternatives. more City hopefully business one the back his things destinations we where commercial more accepting And we'll Tom of today. to those Mexico or better better terms much of which U.S. we our that place are better a now destinations. City the have terms in these us like nice than But are one right we have I opportunities better Our just performing from very love said Mexico given futures, days. City

right priority is Hawaii obviously now Our service. adding

Ghim-Lay Yeo

Sure. Thank you time. for your

Operator

Next The question from Associated David come Koenig with will Press.

David Koenig

think has concern House who to anything communicated But Gary your principals government. I heard talked Southwest heard the have correctly, shutdown that if any their say that can in that of Congress? you about especially or to understood I if say I the you Hi. I you White about

Gary Kelly

was Trade remember that was behalves. the but a top officials communication. on off list on as We head, that our of -- list long communicated don't sure of a of And it Association. The who all association have part my received I'm of that the trade has I

David Koenig

from response are AXA they talking Okay. you And assume What the on feedback what heard. any they gotten have then? that was talked the they to. about people I

Gary Kelly

I and AXA don't about talking recall I'm response. any

David Koenig

Okay.

Gary Kelly

seen I've I've way. I'll seen put in nothing writing, that no -- it response

David Koenig

haven't I can and yet? industry What you you done mean the airline that do

Gary Kelly

House of ongoing is White reach out there think do opportunities -- I to can out I members to that Congress, to all reach to will. reach we leadership, are to out there assure us are and the continue you -- and we can for

David Koenig

All right. Thanks.

Operator

Silk We with have here Weekly. Robert last one more from Travel question. for We'll time

Robert Silk

guys. afternoon Good

Gary Kelly

Hi. Good afternoon.

Robert Silk

Newark airports tracked days of issue be approach them FAA moved the it detect one [indiscernible] of concern ones to relating a will for of the to Southwest to also a other the disable it new obviously, rules drone on that airlines and reported that How potentially ago. for easier couple and them. to and an them for quickly drones on is make big

Gary Kelly

Rob, are still Robert. there? you

Robert Silk

me? hear not you Did

Gary Kelly

Yes.

think We I so. you. got

Robert Silk

asked you hear question? I all. I to do about need I the repeat drones,

Gary Kelly

No, no. We got it.

Mike Van de Ven

strikes times those But or -- of not well is near sure are the familiar the it I drones type or any Southwest not speaking coming making whether bird above regulated a a generally maintained. bird in opportunity is into Airlines critical other flight, I'm is especially I'm and a airports airline this Mike. with just and if drone activity can. the that airspace industry interested in

know is there close operations supportive that airport. we know having other figure drones industry airspace to certain in the very their of requirements all some regulatory oversight especially I having availability trying So new of to them type to terms limit registered, have their are several I them regulatory the the and out for having in of how this groups is focused control technology. FAA and critical that trying on And that. requirements

Gary Kelly

question. they're to can have important so You're be It an not what off is be focused on nice That they them critical. furlough focused would is on on when furlough.

Robert Silk

Thanks. it. I appreciate

Operator

any to back time, or this additional call at like closing Ms. And the Rutherford I'd turn over to for remarks.

Linda Rutherford

us you appreciate today. it. all for you, Thank joining Thank Greg,

any www.swamedia.com. so Of other standing media us you have certainly can course, you is Thanks our much. by if reach site questions, XXX-XXX-XXXX, the group or communications through

Operator

you that gentlemen, concludes call. and today's ladies for joining. Thank And

Southwest Airlines (LUV) 24 Jan 192018 Q4 Earnings call transcript