LUV - Earnings call transcript Q1 2020

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Operator

Good morning, and welcome to the Southwest Airlines' First Quarter 2020 Conference Call. My name is Chad, 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. [Operator Instructions].

At this time, I'd like to turn the call over to Mr. of Director Managing Martinez, Investor Relations. Ryan ahead, go sir. Please

Ryan Martinez

Van for Thanks, of we'll with We're today. our Q&A. thank President; CEO; prepared Tom for Romo, open Operating all and Chad, you joining CFO. Mike and it going Chairman Vice from and Kelly, up us Ven, Nealon, course, Gary Chief Officer; and remarks our de Executive to President Tammy start out then, And

A few quick get before started. disclaimers we

results. are differ forward-looking based future number make We expectations out statements called expectations our the course, remarks, which IR special for make as We to and items our in in of on will on performance. that XXXX, our our current actual earnings well from first a of topics And reasons. as those results reference of quarter are could current covered of release Both these year disclosures in compare we'll GAAP website. results to prior

of underwritten be taking Today, we offerings won't call, we issued them. offerings discuss and cannot notes. on a stock announcing this those questions press public convertible We and our release about common

about We always. and will, our position, questions liquidity burn other related however, topics, take we'll topics current and as and cash discuss those

So turn Gary. started, we'll ahead and with that, it and get go I'll over to

Gary Kelly

thanks performance. a year-over-year. each had performance and better-than-expected and course, We growth our of January higher effects, joining Earnings Ryan, is earnings everybody, our XX% solid were in all strong and domestic. with good COVID-XX about call. revenue and for route Thanks, morning, first cost It's month unit quarter XXXX very over February system

customer scores baggage terms in were handling, That's industry-leading. magnificently. and on-time of performing was performance operation and service our Our

unprecedented of the bookings quite and COVID-XX and until on We were frankly, beginning traffic the on bookings saw in breathtaking. February March effects and end cancellations and effects no

are. So here we

we preparedness, One enduring is were greatest and of and most its strengths prepared. Southwest's

into that the in January, healthy grounding when heels struck. of and despite MAX strong the and momentum performance, the excellent a On very outstanding continued and position February, coronavirus last year's the we're

a was and liquidity the year capital this balance $XX And billion of over the debt that year of unencumbered only surplus $X March sheet, and of history, we started a our amount XX%. well total We to smallest with billion had over on in billion. We with began aircraft. by $XX

and While declines spending this reduced we the spending including for our $X no taken we one X. anticipated XXXX detail catastrophe, March prepared. Tammy, elimination fuel reductions, all time my and were planned returns, schedule shareholder In since we'll in economic by price But over of the actions summary, cuts, billion.

changes support Excluding for includes CapEx working the of from $XXX burn April and payroll and roughly cash CARES million, capital and is proceeds Act, service. our that the debt program

more and through aggressive cut half goal in Our cuts drive pure revenues. lower or hopefully from that be May June increasing levels. to schedule has The been in pre-COVID outflows and cash will spending

position and of the financial shareholders management to over No bondholders years, Our intend continue XX very record. match of always be served Southwest It and to has last continue Airlines. one we has will that financial has or can or profitability record served well, us track been philosophy the and no conservative. one the better

or that environment is problem. we'll we'll asymmetrical Cash debt in Not risk. is this much, available pay buy enough, an down Too a opportunistically. huge assets

forward it near-term for that no business X or issuing has That to has expectations. expectation historically, also years, going been be has very that And With severely travel will recover recover. more, recession recession. a some slowly. to taken has the travel in consumer We're businesses typically affect orders, travel travel millions of tens already business of Further, work, and this put of out damaged. demand will Americans sentiment

needs to up. country are who those travel, willing able open And for back finally, and the to

there's for to they get there. something do So people when

I mentioned most will strongest fare. environment traveler a low of because So carrier. fare That's in low this imperative successful of low to every America's the and demand and we're cost underscore our this all business model,

things: scenarios We're plans one, Nealon. on based a We're that of being working strategic modifications customer Tom three by and the is this experience safe. liquidity basic us ensure and strong. number on working to pandemic President, airport on are emerge at variety on our structure led and feel so see working capital and on that customers through to the that airplane needs We're we our healthy recovery

on retirement we're and de last, Ven. being that's other by Van for on Operating Mike exit working reduced fleet, work obviously the voluntary our We're programs early and working Officer, then employees. And led our or Chief

So before to This has want the thank serving in are running procedures been are they history, our are to battle-hardened. job I are country, employees. vital they and masterful myriad pass our customers resilient. but unprecedented and our heroes. this to airline, crisis And to essential they And and are a our have of company. they all done They are all and a protocols, people and they fearless, Mike, my our implementing I new

very to Southwest for leaders And very hand keeping I'll to I'm grateful sir. strong. over our employees, you, grateful and with that, to it I'm our Mike,

Michael Van de Ven

comments couldn't personal lean their your this Gary. headwind is and just, to own angst I proud frankly, be and and they're And thanks, tenacious a this uncertainty Well, our be And of of just are more into part really I team. amazing. they're to fearless, people. about and really kind steadfast, with deal appreciate They

in a mentioned, performance really measures bag maintenance And of regular with handling previously to those industry of to were investments NOC crewing you daily operating allowed our we on-time our each all complaints adjust to from great we've proved investments And X our ratio they're over demand year lowest execute realizing to the in began critical as the top the made the rapidly we of the or in DOT, changes. overall the costs and February and and to as best the March, our for decade. our our January our had as network that us Now that are to operations various in to we equipment And reacted and measure. operations. we invaluable customer going think the and technology efficiencies recover assets move And had to minimize schedule we for be plans COVID-XX be and they be able forward. I and operating probably

our one So plan return when focus the points. of service MAX year to started, the was primary

existing ensuring we the prepare hopefully, first, operations and our focus to position rapidly support, our operation And threefold: and for our third, whatever environment recovery. managing our are out and eventual customers; as business adapting Now is employees there; to an fleet. safe is conditions our operations daily second, that

of emergency crisis. So has that is minimize it's create VP techniques our teams directors, coordination customers through across Senior we're our job. and it's of efforts together response specifically manage this that that highest spread we a for and XX-day daily additional our introduces and with And mitigation the that XX our basis and across managing The employees is Operations -- are on XX, of tremendous deliveries intentional span that priority to and through the coordinated environment Hospitality, virus. emergency that ensuring doing Goldberg, company focused a He and our are by all working both time needed an whatever one and strategies XX frames. Steve is led and the he program, to

a our procedures adding social where the employees throughout masks in implemented voluntary have wipes sanitizers We've plexiglass We're feasible. guard for operation ticket checks, access temperature cargo gate work. adequate distancing and of and process and shields added the our positions. at hand We've counter to our and agent while face

terms and a down aircraft disinfectant. high-use the enhanced cockpit and with overnight In hospital-grade have includes areas that galleys cleaning, all the process in of the cabin an we cleaning wiping

every as addition an a In month, application surface disinfectant of and and through application that an all anti-microbial as an mist, additional electrostatic aircraft use to of of each covers well of the that, the an mister aircraft. the receives

provide contamination. against So XX days virus procedures those up for protection to

within lastly, risk. We're process we're mitigate on the adding and to during our then, of procedures social have turn, in-cabin further the days. the place XX and next service we've and eliminated the for we using customers techniques process while additional in those expect boarding to cleaning distancing And in board, during

we our begins our and employees needs rebound. as in customers' be short, to travel support will ready to So

various move into we As travel restrictions, and been experienced the abating. of associated state-by-state the some then the May, international restrictions all with disruptions closures that we've have ATC the

flight and operation. We Our published days activity easily we respect focus look ability earlier. very customers, have and flight on to flexible tools our the I and reaccommodate can schedule can flights demand, reducing about cost-effective mentioned is most while with be X-plus out bookings further. with a X,XXX running the simultaneously And to is we day, the our

form So and comes costs. minimize and burn of in a the flight landing fuel reduction engine further cash to the there goal that fees is our and in

left really -- time cancellations that operate, activity to The the DOT really us the savings. significant cash aircraft. they're the in-flight excess And is on-time count flights arrival do published that drawback actually, on statistics. me that mid- against averaging has in reduction with the But the the we That fact concerned the near on only performance in upper-XXs that given day. term, each the those hasn't they

managing long-term through storage through of we're that parking programs. combination and a So

MAX program. on requirement. moved a XXX heavy have we based maintenance as and respect storage XXX NG those in storage. with into upcoming to proximity XX program, So age storage an And long-term we've to The their the selected our were combining aircraft NG additional the with significant aircraft aircraft long-term

reintroduced a So probably aircraft time for storage, their bring be or take the before X more can will programs to into those with active X in those of of each to maintenance respect they minimum aircraft of current long-term it fleet. days and

We a parking earnings the aircraft fuel latest program in program. training most benefits that And parking schedules, it's take service. aircraft of maintenance revenue the less the on flying programs part and short-term rotate NGs couple not and is bring our storage Boeing's costs least the the given of do short-term service on in cost-effective there's It active on update flying storage the it maintenance ready January When requirements, out burn. XXX of pilot in before has of to and will published into terms long-term fly that back to and at got MAX of lower fly is active Based fleet, it months to are call. aircraft have much to return remain our and the is the aircraft those update cost-effective time costs. and MAX the It's about the MAX. more since and engine to the

facilities. schedules Boeing the in as aircraft just And of isn't point. this reminder, Southwest included So storage the in in MAX Airlines a configuration any XX at published our their flight has

we've to employees they're leaves, up, our their company big families August. programs are through if way. out our wrapping voluntary many offered home So needed, of the employees taking a in extended advantage And and with of big, be operations helping these

We're exploring and extended additional out options. early time-off further

Our highest our is they safety work and travel. of priority and the customers employees as

customers day. take We reduce cost, a ferocious really, every and our storage are war to activity fight. managing in lowest our are that have really care have of aircraft this time partner uncertainty. And we form are operational or a they of plans do to a profile, we warriors actively with parking to really literally have XXX to we blessed of We COVID-XX, great Boeing, a and in are and in daily our our to manage cost some ready at at inspire fleet program me group of

with it to over so you. I'll turn that, And Tom,

Thomas Nealon

All right. everybody. Good Thank morning, you, Mike.

to So got start you -- want our I acknowledge to our also people. team, by

of is really doing And our thank center. guys folks operations that call are that the you Honestly, amazing. our the really that's all every all especially thanks for our thank to for out a want our and What And day on of is have course, all pilots very, taking our ground customers. NOC, and So you the mean all say and are at in to our the truly hangers And I our centers and to employees are care guys. attendants of special of admiration operations to our indescribable. maintenance want each respect flight just I heroic. who employees, you're very frontline airports, genuine. I doing. you that our planes you're you of network I

as of well and kind our line our by started as February accounts, had strong. RASM loads quarter and started indicated And Mike expected. the much as much in off, and Demand as pricing very and bookings March expectations. all we and first were off in it already, both capacity, very January Gary very with solid We were

also lot We talk of RASM Consumer up about double was a X.X% February. a in the card confidence Rewards quarter. was on very our in had program, and member guidance of for very, up at being record RAP On our to and doing we very X.X% spending was well. So always and was spend our business, cards strong digits co-brand year-over-year. levels January it

customer So for also industry, top both targets. double we're are which February, our satisfaction great record And of stringent very digits scores, which performance the the are levels versus there. our being January with both months up very at internal targets, and always

phenomenal how So was shaping quarter up. the

February, beginning from And obviously, direct COVID-XX. quickly. very everything we to changed impact in And late began a very see dramatically and

but well, in accelerate and to point, Now we into March. still our as see to continued were begin increase significant did relatively up at this Gary said, cancellations, that a bookings holding

situation exceed a which cancellations. bookings. new began and continued dramatically. Now March into March massive trip of of over X, by never-before-seen a this net to month negative the the up in grow spike with We Cancellations in ended had trend XXX% resulted year-over-year, cancellations bookings, being to escalated

March, and declined collapsed X,XXX cancellations our of the reduce XX% XX% of what of to did expect, you for flights. would we canceling demand as year-over-year. And roughly our the back And flights. we month began capacity we up for ended So full March, our daily grew, half

March, reduction they of factors Now back some our where how off, and a how rapidly fell of single perspective in even of load month, dropped with that's by week today. flights steadily the deeply the just last to of half digits to give XX% and the demand are

other this lower seeing environment. credit acquisitions, from are dramatically as the lower XX% as and none And dropped operating is and reduced a And portfolios revenue which revenue revenues March Our experiencing dropped partner year-over-year. nearly also course, of in well. you'd off expect, ancillary as our of card Chase spending we're surprise

$X performance RASM So XX.X%, first our expectations the over and off quarter, is for billion. revenue our billion, negative was $X.X our was just a which by

tough see and with at some continuing to Now states point, predict continuing still place in in May, we'll here is see April trends year-over-year level single-digit very, this revenue it we're of to and travel how around. turn to and sheltering down At record exactly the place, roughly a point, in have and XX% low operating XX% restrictions when with factors. very demand this countries load revenue to many lot of and trends passenger

staying can we're manage and So focused on we those to. that control things that can we

our over of all that's the control schedule. to in And Airlines. continue Southwest scores have and brand as because have highest of customer we the we Mike alluded people we to. And So of quality flight the of control operation, have and industry, the our

capacity. shifting So quarter second to now

published month currently schedules. range capacity of pre-COVID the capacity May XX% the compared And is XX% first be April to of month. down in down of and The weeks for full Our XX% June around was right weeks down with XX%. roughly XX% for is down last the of the two X month will the

For our also a.m. we've before operating day. May June, X By removing flights p.m. of shortened X our and after and many

in over So we've shoulder restructured to XX% preserve domestic in. service to X our schedules. and network itineraries we've been our our available the flying the by also pulled the markets, while all flight were across way, Hawaii of able maintaining that cities, We've including service of prior

in jointly The this closer on tactically network to tactical This schedules, being mentioned make need show and schedule we I demand. is but to in will and situation, fluid as based And we'll capacity is also by team continue manage managed that reductions just up and week-to-week, republished our decisions planning continue day-to-day, center. a to. capacity we'll very our operations network and capacity

a a bit. Changing quite bit gears --

capabilities. ticketing we'll last our GDS Our what all managers I week settlement absolutely content management update on corporate has been announced might last on call, ports response, will and phenomenal, which we corporate live country Apollo of on with companies and customers. X going our the across that be excited standard gave travel you our initiative, which for and with of growing our a platforms, focused and travel this for When recall quick is market. May share Worldspan means GDS industry now means that available we're the about In us be travel everyday low-fare and travel the

to So and from strong will back. a time, perspective, in but than as speed it it corporate will begins be we business ahead, our back, travel going spite travel COVID, and come we'll share. take to in a of is It's take full come more position some

Southwest wrap to industry into the reasons strong as clear. ready doubt, be up of the most and this a environment. airline, in to degree Without lot of But came a reshape a saying yet and I'm we the likely will situation going well-prepared confident that's be by the out very very not U.S. So have normal to this. new Southwest come that to this will compete aggressively we'll

that, with So over to to it I'm going turn Tammy.

Tammy Romo

teams, over rally teams commercial to moment employees quick for weeks. really, cost very legal and recognize I'd governmental teams, to teams, operations teams, also covered, like All right. in trajectory I a and to on move preserving comments trend, want off costs, our happy and fleet, revenue out on production focused round as before Tom. to dramatically cost a tireless With efforts take their our Q&A. our cash. finance term. Southwest liquidity are just past to the reshape for their together with controlling the Thank quick we work clearly affairs commend Tom to today's you, our our to I'm near discussion our we all

financial night. them night And to They the risen forecasts in warriors thank our Today's task have rapidly face challenge, rapidly significant I this their day efforts. are and day and and scenarios and evolving for sincerely after continued after truly actions. want often the people changing of environment calls to for

Our have how first increased X.X% cost been trends which to reduce quarter declining was quarter fuel X first quarter previously capacity profit we diligent we to first lower year-over-year. only Despite CASM, illustrate expected, X than points unit and nearly sharing, X% cost quickly. year-over-year, excluding

in to being non-fuel fall we on our million measures approximately cost sudden the structure roughly gallons coming We savings of fewer those coupled less first demand, $XXX XX% alone, million cost to from based prices, and March in reduction. capacity $XXX from despite in half were roughly For with fuel the saved of fixed off due roughly quarter with closing another gallons. able self-help falling save consumed

In second expected to capacity XX%. down versus be the And original down to be is least are both at around estimating operating quarter, to XX%, expectations prior we expenses pandemic.

factor decline, you benefit to quarter fuel in price in expected the are plan. costs versus nearly If second down from XX% the be

So These self-help relief cost cost between on variable of side in actions, efforts we cuts. our more than $X year combined have to relative significant seeing XXXX and the expenses. capacity in operating billion a reduction resulted are relief full

launch In year We've payments. reduced streams, continuing and billion our such this year, have virtually capital aircraft projects several canceled or delivery GDS expenditures terms eliminated $X with covered. canceled on we to deferred projects are but this all work critical and we spending, our Tom hundreds as of work over that recent of deferred

the The for allows new with working XX revised agreement take to XXXX aircraft have on no and We are of us end XXXX. aircraft more payment with schedules and agreement XXXX. delivery them Boeing a and through currently our than

the expect fewer have not we we MAX XX planning were for time specifics, currently at for but this point, the so down to nailed year. and some that than XXXX, we do receive aircraft previously to this We have

and over I with retirement are a and as to several of both our growth. on fleet, of no with mindful very dynamic, we quickly to that recovery years, ourselves fleet the able environment work needed. up to recovery or next Between plans flexibility the or for prolonged course, our comfortable travel adjust is we down a feel to to flex with position fluid and our want demand be And Boeing -XXX based

yet that was for book We order morning, it our agreement. March filed have included and in our XX-Q this isn't this XX updated

XXXX have parties, half. or XX deliveries However, excluding the for roughly deliveries, aircraft third contractual with XXXX least at and XX leased reduced aircraft our by with we Boeing

is of cash we quickly, am in have I what lower proud burn and up accomplished in significantly showing quarter. second it

burn core be we million range million payroll from day. cash to but outlook in pre-pandemic $XX second from $XX of second to Our the that per day. refunds very expenditures now clear, average average the sales, to to the to financing excludes in debt for $XX $XX impacts range average original quarter date, and outflows, program. service, With was very, cash be million core actions capital core and quarter and sharing I'm burn per estimate cash million our cash of transactions includes the And proceeds the cash burn support

course, shared seeing we much aren't terms that Of bookings quarter. for in of we've second

in cancellations -- revenue tickets sold in trip of the excuse refunds, terms Therefore, terms In our credits. of majority nonrefundable. of of are travel of issuances have me, roughly XX% resulted

record levels, month. trip $XXX approximately are are Thus April, the million. or cycle were half and cash March, to cancellations given far refunds roughly peaked running that trip For elevated large much total March of somewhat cancellations total lower cash this in when refunds

share you liability. with to a thoughts air like to So I'd traffic brings on few that me

have XX, loyalty been balance around was which for outstanding billion our $X.X air already Rapid About March our balance traffic issued liability billion, represents of travel traffic X/X As of $X.X credits or $X.X Rewards. air billion. that total was of liability program XX%

total that So to million of Rapid credits traffic $XXX XX% expect or not which months. travel fly air to represents future in related to is very manageable. And Rewards of $XXX that is we this less our liability, leaves a balance that million than issued net,

I has cost highlight to that On one the want area helped. front, really

million and March save the XXX,XXX wages. voluntary alone, programs. money pitching almost an and in company estimated saving in We by us temporary to had are employees time-off participating in salaries Our programs reduced these in $XX really hours leave from

And pay we have employees currently take utilizing employees partial May, electing voluntary in to voluntary April. leave X,XXX X,XXX more over than and programs leave. for have We

we look at we best people. workforce to dramatically and impact As schedule, to limit know to how flight adapt we our manage a reduced have to our

We programs. have along also early retirement, voluntary leave of and options we through extended long-term with considering end August, programs the are for leave

a share few comments I'll fuel. quick on

first crude year-over-year. Our $XX barrel $X.XX X.X% oil dramatic per per story Brent or down at the gallon, in barrel was with averaged of barrel quarter end crude ending first at per by $X.XX Brent March. the $XX fuel January quarter, early in per in but is fall-off and prices oil $XX price real a low of the

see beginning fuel lower continue saved to We the relief at energy quarter of $XX the market as from the prices to year. significant prices, lower market in prices compared first million

billion we million quarter, estimate of nearly second gallon. range, $X.XX since And significantly $XXX price beginning capacity fuel to currently which year's XXXX price $X be down second to fuel the year. revenue year in much year per of lower this reduction per $X.XX estimate When from on gallon than we the cuts, gallons in last For to is due beginning over the relief fuel a the quarter cost of environment. welcome is expense of $X cash low and considering this down fuel which levels,

consumed. our as as million will hedges for of being program drastically result to days, our remains hedging which the direct gallons continue to our even in This fuel reduced, unchanged. is market continued capacity gallon us have in XXXX, due adjustments a of portfolio. the lower to cost premium the premium hedged case recent have risk made cost fully any percentage to lack as per year falling the long this fuel $XX while but increased be we has hedging Our in to And participate allows fuel fall prices, floor not in

related spiked So $XX mark-to-market we that a albeit GAAP first losses comprehensive quarter, second triggering example, $X periods. is recognized gains premium compared a in than want in gallon last quarter to premium are due and expense, our more $X.XX year-over-year at metrics per in $X.XX XXXX. noise lower in year. isn't reduction of to quarter positions were per other there XXX% capacity prior adjustments quarter other the And million $X cuts. to out to hedging hedged of There I fuel gallon income with million related to second million in second for in for or in our loss movement that gallons costs point simply the significant just

MAX year-over-year Despite the X.X% in efficiency our to reduced due improved fleet, quarter fuel the ongoing fuel-efficient first March. grounding capacity of

live, second fewer we our same to improvement year-over-year aircraft, see And we operated for reason. we in test less As of a fuel-efficient improvement which should the year-over-year. quarter net slight further

Finally, We so again. our we liquidity cash But do reserves, reducing the on quarter position first sources those I short-term sources to in of billion. to few billion We ended cash press morning and with thoughts bolster and liquidity. further quick are we more of investments from remain laser-focused over year, which a release a we included evaluating burn this balance great won't cash $X done. aren't detail $X.X cash of yesterday, a have our other $X.X billion through and and list of totaled incremental in currently We the of cash this our so.

balance are the addressing our to liquidity Our and that so scenario a capital issue rating while sheet the prepared XXXX. way goal grade in well add protects into is for that investment we any

after real engines We grade and by airline assets, ground other domestic as are spare $X estate, And unencumbered even still financing X far, our over equipment, all $X thus rating such be name transactions billion few. roughly billion have to unencumbered rated agencies. a and aircraft to the in we only in investment

leveraging conserving a and adjusting sheet keeping and closing position on still Despite of and quarter to and customer first our generated loss, XX-month financial liquidity. are tax safe, In on XX.X% XX.X% fleet on as to reiterate or necessary, our after cash, pretax and return our trailing further our our invested capital comments today, basis. flight employees strong we net balance focused schedules our boost we

know like We to But will and have and airline, as travel through U.S. the what we broader emerge don't to we a operationally. know team times. this a seasoned has how this don't successfully record managed the best proven We unfold, air continue that leadership crisis as will financially with into look uncertain recovery from track crisis both airline, came best plan prepared prepared U.S. to economy. we the the and

we With ready analyst Chad, questions. take are that, to

Operator

[Operator Instructions].

from First Keay with question come Wolfe Research. will Hunter

Hunter Keay

well. the available coming the hundreds coming you're basis years the think debt the maturities of issues lightly on hope do used global attractiveness of the few with When NGs years? you're contemplate a you you've about facing how and you had next MAX, I over in the

Tammy Romo

Yes, with doing are new working airplanes I'm here. us great manage our a to great. significant preference fleet to partner they have just Boeing through get you plan, how situation us, with our that restructure have been Boeing. book from our as certainly we I'll say Hunter. order the we been is with doing? has And Hunter, flexibility and

I have So the opportunities we'll we Boeing. new airplanes think need plenty from of that get to

should have flexibility in just to more to have point And But also have retire. opportunities other is on also event, I'll tap that and we then the we aircraft of any airplanes. out side, we will plenty need into which

cost fuel low that airplanes. have less airplanes, levels, our So And we opportunities do is as mind fuel older prices -- in costs, largest fuel-efficient to you though fuel just price know, are second even at retire keep our component.

the very having meaningful XX% to on and still savings a So relative very significant. burn is fuel aircraft next-gen

operating years good low come. and fleet that on way basis to continue also our economics as So always, do to and years a planning for ownership an in we'll costs delivers delivers

Hunter Keay

at high through you're scenarios. some Gary, what but going if talked here, you level, then, recovery scenarios of -- planning? for out of capacity inputs frame be and contingency you wondering you And make those thanks. about not just I working the on you'd to revenue you me on in comfortable around as those think predictions sort any I Tammy or Tom, well, about us mentioned, three basic high-level -- either terms three a know three are with numbers that recovery could Okay, sharing basic you was together

Gary Kelly

And continue. Sure, trends current One really would I the themes. Yes. Hunter. are they be think

L-shaped So it's recovery. an

recovery thirdly, let's beginning, And recovery. in quarter, gradual be say, one just off Another would the U-shaped maybe would be fourth Tom. a an of increase a L-shaped then,

want work the a downsize September So is would not of PSP the that got Act way with to this about the airline. Hunter, think think, through CARES And all involuntarily the we've I that is XX you commitment to I underway.

we'll So if that. improve, things don't we do after have something -- to just

we want I very be just options to say, our with would what prepared So by mid-summer. are. Tom,

We've May. So hope It seen we've revenue we to in week to is weeks out we and where very bottomed trends improve like the from gradual are good of May April. improvement does X. line sight My continue got of a X April. in the first feel pretty that

that, that so would continue. And hope I would

pretty got We've modest expectations.

scenario. by I terms to for encourage hopefully just which August, prepared beginning of basic us be And improvement on. be But think I it's fair be got and July, say too in to continue at point. plan by to about negative this think the see some got But pessimistic -- would that to there. prepared hopefully, we're any is lock here, June for down to report we've we're to prepared, we've

hopefully, So some gives you insight. that

without We million. in capital mentioned, April $XXX -- changes is cash just As that the on continue I net working we at burn can't pace.

we would the certainly with schedule reductions to we levers So cuts push. cost additional that and be would that attack immediate the would

fleet more You carries a anyway. on the asked we're And -- equipment work, risk, Mike the not fleet. we're right now fleet used some grow it it's and that is about but where position is we to thinking in additional bringing working the plan. want in

want you probably answering -- the -- our of is this, your and now where about I airplanes. second again, but scenario all said question, we of have we'll which, just an airplanes, element bias need right Mike, think, more think is a get If so have into fleet, period more we I welcome airplanes, fewer Tammy we the thinking not in time. to reasonable

on retire we've So -- earlier Tammy with holding a because the made point number program we MAX airplanes the of back deliveries. that that fair the 'XX, delays got XXXX and today we to of a were in

So we're looking at more I think that. aggressively

voluntary in in to work expenses. our exit employees on just order opportunities packages And addition for to working already we're finally, offering reduced for cut employees

won't we towards scenario. that some, now, do, to radically. right not face a But we the Hopefully, the have plan. is have bias shrinking airline if we'll So

Operator

Pfennigwerth from with Duane our will question Evercore come And next ISI.

Duane Pfennigwerth

downturns. where situation industry for on period comparison could you hoping recover going now? Why out attributes. the prior quarters Obviously, for post traffic growth, post you that following Gary, unique think I And seen couple if X/XX positive years was X/XX, coming back to would what to short? you immediately be X/XX falls is but the has comparison of speak good was it do have But to Southwest. or we of only a a what think the took it

Gary Kelly

I the we the position in was as We were a experienced, recessions never large Southwest a today. in are as I of brand. we've we -- least strong were at think that past, been, low-cost, course, similar have where

didn't plenty unexpected. the balance strong there's of prepared had same were We and have a we We But footprint. similarities. we of cash, for So lot kind the of sheet. had a a

are I very So similar. all those think

that The this points repetitive arguing a doubt travel is X earlier pattern reasons, is they I where and that economic travel. can previous to same that recessions experienced course, cut be recession the orders. of but the And businesses reasons. sharply, for can I is and business we're Thou not was that very -- now disciplined shalt no addition perhaps I'd issue different seeing at in be very we've little a in seen and

was many you pointed years. overall, travel, But business of the as out, recovery,

the benefited fares, in and it Southwest so low-cost everything very scenarios And XXXX. XXXX, XXXXs. was in we And because the X/XX, gained Gulf the by largest airline obviously, we early after changed dramatically recovery low those War and dramatic and the share. And country became, shortly, after our our very of first in

people, contemporary more happened you times know there. is XXXX what's So for and

exactly Well, going that I a knows other and over we that hard the pass. period we're we what to it is never the this future. right be the And I long do be And too crazy. my time. But same if it's shall problem now. can to are is one was in point, just is of world the hear going to no recover have again. that New the And like that's we're York roaring Spanish recover. which have in can hope of But XXXX, reason through side. this of flu far sort But than we and that depths So what will experiencing 'XXs today, to get of And the think see confidence fully read the following expecting will comments to well, there's through is every about, worse traffic this.

be things But in X don't a for or are can't to I that normal realistically, just to back we going expect that believe months. XX minute.

staying So you you power, need cost, need you need low great people.

are. of And where we need You resolve. that's kind

I'm proud do We hard our restructure also mind need of will wrap reacted how radically they And quickly but around, and a really is need folks to so to that and if to have folks our have, Airlines, we plan. Southwest we that. your something

of I don't possible have here. Does and I buy we'll I the answer all every think recovery, But the high-five now. if very and model, it's question? but we'll we more be successful feel be well, think And will a to a scenario right have that's some we're and I that business necessary, we a think likely that, airplanes. most going outcome essence great your for product, don't prepared V-shape go other that each

Duane Pfennigwerth

give package? perspective be and loans alternative on we follow-up, thinking of actions Or addition the the And how the you're to taking of a negatives you're helpful. that that? actions thinking to? stimulus And today, can portion What the light an some you're today as for in loans? just That's the taking the are about positives should in CARES' of us you just about

Gary Kelly

a to important pretty basically, the flood federal it get without we like this, felt level, sir. and know can government, country coming was liquidity for into to want Tammy I so government, we with But this Yes, high having will And depression. the to our too. through speak crisis this again, at a

is my CARES view, Act into and by way I we payroll view thus think that's far. And So many. that the shared tapped that support the program is through

So all very that. with familiar you're

May, that share June, -- We'll go I'm sorry, far. $X.X was billion, billion. July. next with so gotten XX half Our over I'll April half the days, May, get $X.X of the other forward the calendar. We've

are share the There's part week. loan is that the the available program. And to But So CARES application that payroll Act of program. referring the little loan program. our you is $X.X due this loan of component other of the industry our share is the part to support rata that's other is secured -- billion. that big pro of a the The

the We talk that access of will reserve apply. amount. about Tammy to We'll that. you to can cost

advantage we're now, of to taking right think I committed not that.

other We time us have do XX so, to September evaluate until give financing will to and options. that

Hunter how today's Obviously, and beyond we're it, sheet very to how down we're think I'm going time. restructure this in going going balance I really year putting pay pleased strong the to a news, we're position with. debt, with that to ourselves just think over liquidity need this think But mentioned to we're

very be dividends lot can't carries from can't and perspectives, do loan know, year, the the Tammy active well, will a think carries, working thing to your program is repurchases. pay it is the loan of -- continue, time I conditions. during So plus share it I about any a We outstanding team her in The this. that

not be on company's to just You but about restriction compensation, another executive may as it's ability manage. concerned the

let pretty we we've So I think is speak I'll to collateral security, cost the of will pretty Tammy the to know. But reasonable. the led that. don't believe required, been but the debt lenient, be

off paying the all also off So be entertain pretty taking long it things that that I think And carefully. as quickly as those could and then conditions to out as to thought it well. quickly of come want be loan very have through we

now, not right and to take us, for to it's as out an it. we're you So option Anything there committed Tammy? add, want

Tammy Romo

it Gary, think really all. you covered I No,

senior the attractive structure time. as And term of of basis XXX prepayable plus the at are reasonable, a terms the secured X-year said, in LIBOR the Just that would that loan. any it's and loan loan, Gary points, is be terms

grateful So it and us just to wonderful options gives and lot really certainly have, that. it's here, for a backstop we're of a very

Operator

Baker from come will JPMorgan. question next The of Jamie

Jamie Baker

is this you I roaring the vernacular I've really not the think XX you a to and almost actually was just Gary, just time 'XXs. the years, first that the I've in refer reference known past. I thinking, of like part heard lot, I

Gary Kelly

wasn't wasn't I there. there. I

Jamie Baker

us Not suggesting yes. were. Oh, either that of

you the Tammy, billion give composition of the assets? could for non-aircraft $X unencumbered First us question in

Tammy Romo

So assets like really billion miscellaneous base... slots, just simulators, gates, the non-encumbered, of $X they're

Gary Kelly

Engine.

Tammy Romo

Yes.

Just general that. asset such as

Jamie Baker

LaGuardia in But pool. D.C. Okay. slots that are and

that that? in You're counting

Tammy Romo

Yes. Yes. It of would those assets. sort include of all sort of -- that

Gary Kelly

There's lightbulbs no lightbulbs. But that number. no in

Jamie Baker

no assumptions, correct? also loyalty Got it. it. Got But

Tammy Romo

No, sir.

Jamie Baker

Okay. for second Gary. probably And question,

you when envisioning? curious You selling how on And how indicated capacity? and be fully expand could based file and be on schedules, cap middle reality, entire the flowing I in put this could by forward. a place. if it's not I'm the going guide much you you discuss you will X/X where going still in as out I whatever guess also, cabin of capacity when that assume seats? as of this sort maybe we're to capacity, I morning reflected you seat seat taking complement, be you're lower difference mean, what limits on if

Gary Kelly

Yes, sir.

and So I efforts, of to got mentioned is want we've series one. work in And definitely that. speak my remarks, this a as to I

pass. outset, just, the too this shall at I'll So say, -- and

forevermore. So of not back It's when a what question to normal. is we this and to do to need to just here get will do get Things from there?

there that all So we in is know health meantime, a the concern.

the back Texas, in polls, they announced think up for soon. the state quarters business Abbott people here shows informal Governor and it of X opening do too is and that yesterday it's So

to So and safe to is customers able the it to we the willing airport. that to come It's work to airplane. get do know safe that we have on travel to convince to that are

techniques. know the where We're all we to got masks. -- going you've And

morning cleaning who was proud a new that and got full very all was unexpectedly went things on I'm social distancing. woman Mike with we're you've but was this it and a of that. which then disinfecting doing through be doing We'll flight of, there, was PPE. a there's she the who story There uncomfortable just So and

So and working be this. on for will thinking, now, Tom we are

that take airplane. that bookings up thinking perhaps won't would are an We we fill

anybody middle we to would simply nor us do effort a the we be would take in block there than nor So we certainly that bookings less to manage it would Where from seats middle going prevent out a want that. physical I not to standpoint. is it to from would something but nothing we're airplane, and seed, an go sitting to the seat

That is an idea.

haven't We announced yet. that

the We be a but haven't social to address distancing on that yet, would getting that a airplane. logical implemented about way concern

then, the to that, aren't would So willing you of fine, be, Jamie, But to flip you're can people airplane. if well, try risk that, to the sell-out going fail.

follow sure all about know of low cash to had expenses be employees mandating do competitors time things, of be customers So that to for cost, that have with We'll thinking have an announcement have that part mask like this, tuned again, the manage on guidelines. everything making carefully, stay terms question. argues we of in we that plenty of and We'll doing our But today. CDC managing doing this that period. and I be our customers. that really things to way to through one our certainly just on

Operator

Bank. with Mike question The next from be Linenberg will Deutsche

Michael Linenberg

a revenues network, more I that do will Mike. Just, to your to XX%. When cancellations, look does you I is that And seem lot it that I'm should what flexibility of cuts, Or would like a point-to-point? it bit cash. a for more not are more -- maybe When theory, actually you just the sure preserve how look at your close-in lot fact with much guess, the capacity two which, is give in this do of suspect down function you a XX% than here. does at a question less and you I cutting

that? Just thoughts on

Gary Kelly

the It's really latter.

a I such And thumb, traffic guess demand should not now, to two-pronged will team, all as of cancel And know will effort in which, assume now, technological effort. to takes and schedule, an of will Mike's right sort so -- quite a flight, we'll aggressively. we than light. obviously, believe a reduced it a be. a ahead be But schedule bit And -- think will that go publish then you not, that operating guesswork -- will it it's of what scheduled as a of Mike's team we're fly. on rule Right days we basis, team or Tom's it's more to will it's accomplish.

So Mike, on want comment Tom may to all you and it.

Thomas Nealon

XX%. I like actually easier than honestly, with on for put where jump many ASMs at respond May but at example, out back we we reductions we one. I'll can. can. O&D to only take it as and maintain take if capacity I are, you And But need as by accordingly. capacity take markets it's to possibly to itineraries at we're this It's in. are June. And a our down about I'd our that just just point out, XX%, this point, more look where we April, me, -- like are reducing lot Mike, our is capacity I'll think we for If to

we're So maintaining itineraries.

of Now competition. that's mix our quite the different than

So that I feel good markets. we really are serving the

the will. it to That's have And the We it put and operation pull take we'll like, shelf, selling, the just we'll then product out. it you in. very back out we'll take product if hard is of see if isn't It's you'll out. capacity the what

I'd rather it on have and hand as it So necessary. out pull

Gary Kelly

you reducing we'll reduce be from we another the So XX least that schedule, it you? can Mike, can't -- our points, why said capacity XX%. it at that's could And Mike,

Michael Linenberg

Yes.

today. we're -- X,XXX close slightly flight-ish got operating that's about And we've than May. for So that scheduled fewer

if need I cut a can that little So to. we that we think down bit

Gary Kelly

if well. isn't in a we're a cutting is -- we're cash that looking the really operating And just trying of to thing traffic expenses. costs. the I goal flight producing to at other or reach aggressive a think it's we'll here there, going be And the positioned do milestone profit,

bringing if flight surface overhead. it's that's cover still saying even use cash there's little will, positive, better you -- enough on there So still that fly to a and it sit on may opposed it that much letting that too as in that the to capacity, it might be ground. though appear airplane That's while cash the not to just

Michael Linenberg

comments, congrues then within of also talked you two, Gary, like the it you low your sentence a And realize change versus be now? do this -- have opening does to will thinking arguably to early. that people in permanent this going think low -- helpful. fares. feel it's importance and about very I those to then modification talked higher back forward. or how And That's the there about of in about costs fly you experience. are tied to Okay. that fares? new And experience I your customer Are just, How some book And how

Gary Kelly

again, is Yes, flight experience Mike, forevermore willing accept that it early. not is And I'm the yet changed. to

that. with agree don't I So

and year going and living this yes, pandemic until to oh, this behind operating differently. think is be I us, For we're

Going a is to to different. going be restaurant

So get will we -- get point, this some will and normal. back at us, behind but to

opportunity. these meantime, might I on. our the to effort structure the is that cost what think need be We working things, to in of that's those of part or our revenue So see restructuring of mindful Tom kind have things impact

impress was it point I the -- matter, is to everything trying doesn't relative. what I think on is

So there's change the this going pressure the focus that even think apply I important And more and across going it's and because just will of in ever us industry be is it's pressure. going low -- revenue makes be that's wins, than History cost forward. to in well where to back that here, here more it's terms position to question. the recessions, shows from addition our Duane's than It's -- to served cost through certainly, evenly it ever. and, low-cost the

Operator

Crédit question. we we'll time last Caiado our gentlemen, more and have Ladies take with for And Joe one question Suisse. from

Joe Caiado

on and to this. you crisis that especially recovery. sits chain ability perhaps any the high-level on you the Are industry the smaller support Gary, and comment navigate obviously see suppliers and and you the a that an to question. been in have the supply concerns and come and and ask there? underneath what Can then worried to you vendors of supply you you survive at their focus ultimately to just navigate everything about side I'll other doing The has current position all out Southwest crisis can immediate chain

Gary Kelly

that's Joe, a great question. Well,

this think is in I catastrophe. mean, I -- this a

I Daily, morning, about about there's So was and Aviation guess I worry an plenty they about. I suppliers. to And it reporting it this not about worry was There that. our that survive. yes, worry Airbus article -- may in

So yes. this --

are and think far, Now course, go. in weeks a of so terms we I we've into got of. not long getting fairness, if up chain, any any into aware of leads -- that supply don't our way -- it's I'll what we're put only, seen us problems X that I But of that we've of don't in in it this, executing. seen Tammy running know to the I'm way, way

Tammy Romo

I agree, Gary.

I think fantastic PPE, our in to secure they've what doing so secure is able job that, need. they've in team terms to hard supply been far, our just chain, And of disruptions. but challenging we least major really has no a situation what worked a been at really

Joe Caiado

I appreciate thoughts. Stay those safe.

Tammy Romo

too. You

Gary Kelly

afternoon. call analyst Okay. of the you a nice today. have for and portion Thank Well, wraps all that up joining, the

Operator

to Ladies now Chief today's portion Senior begin Rutherford, Ms. media Thank Vice you. of Linda the call. and I'd will we Officer. President like gentlemen, Communications and introduce

Linda Rutherford

give for the and I instructions Q&A into Chad. jump if go to and how up you questions. right you, And want portion, Chad, on queue welcome. to Hello, everyone, think Thank we'll ahead them some

Operator

And Schlangenstein our will Instructions] from Mary first [Operator come with Bloomberg. question today

Mary Schlangenstein

to I during or wear at just the to ask passengers some point flight of go crew facemasks real Would to airport, guess? the quickly. flight, or I wanted requiring

Michael Van de Ven

this is Mary, Mike.

guidance We can. as have follow to been best CDC we trying

be our our those -- the employees for on to have recommended of if they vast customers wear have employees while of a process positions. date, to wear to that, policy mask like naturally we're in position with employees in need our and the are not near follow wear our or And better highly do going But while customers to a with seen instructions. out frontline-facing were in the that the customers they at they temporary work respect mask and then majority a work one to have have are that our that just traveling. at We we front-line in one and and their also them. available they'll rolling we term, would customers masks to least don't And

Mary Schlangenstein

at But for this passengers? point, Okay. no requirement

Gary Kelly

valid with think of we've requirement. the question through have people I ourselves. it's But and Yes, Mary. back we're that it's I the think gotten vast to to fair a say this. just No the that confronted majority been think that one do don't to point -- continuing where

earlier, in sheltering Texas, aren't everyone can starting and people people been an here as going on home around now to we're we comfortable think has as mask majority out there's at a strong everybody on Friday. a unless of I who has venture were them find So that example. that talking And

a us it's for bit think judgment. I to little So make premature that

be think -- aggressive use their common -- but made own good we sense, their all to make this we in I may need people we inclined particular we're let there, to case, be haven't may more decision but that yet.

Operator

with Tracy from question next Reuters. comes The Rucinski

Tracy Rucinski

it get that pushed XXXX that I Is deliveries order your some the with reduce Boeing book your to assume ultimately canceled? and fair MAX deliveries wanted to to as ask line through review. about agreement be will down

Michael Van de Ven

So yes, is again. Mike this

-- great performance. long-term position So fleet. engine the good We've on engine really really that costs will fuel-efficient, to the a And The Southwest has It's it is the great we in our Airlines, airplane be price so have into got got airplane. just bring airplane. MAX good. the a are in at best

a of airplanes lot additional And have sitting the now, Boeing doesn't to order in so on from have of book. with right we make it many flexibility we sense a airplanes ground, bring lot Boeing. So the

is orders to have need the the have So do of rebound, fly fleet. -- is to Gary that to -- in flexibility going airplanes down. we're industry think going said, going this I to and But lot ultimately a we shift do as

And do the fleet, to best so MAX or in. on the taking fleet be us older to for I retire we the want that's bring we of by And to airplanes the think early need manage the if fleet. position to out

Gary Kelly

position. -- haven't there's cancellation moving. we Tammy, of They're just no the But

Tammy Romo

that no think we a we're with Boeing. far is book announced it's return takeaway of Southwest, that MAX too is makes but Boeing your so And piece just that should order No. what restructuring we through just Yes, our that. just to I thoughtful to sense obviously, working still going be And -- a to But very far. so service, delivery the for know. and with -- them be so is on with schedule we'll cancellations work and early

Tracy Rucinski

negotiations regarding That's more, if affects the really compensation? could understand Boeing situation you helpful. new us one And help with your how just MAX

Gary Kelly

don't it. that the I Well, we all that's of think right need In fairness, part now. we the We MAX don't have. airplanes all need

MAX being in to be by damaged here for it's me to argue to we're So that them April, delays honest. hard brutally

all great we again, -- Boeing. that, So is relationship a with have of

crisis here through customer reason we're work anxious working the arguably, they're and air, back every today. together hard think, to well world. MAX don't ungrounded -- to believe this We're it in continue recertified. And get we an with around FAA there's worked far, and have together. with their very it the to I to we MAX get the I and But that we've so the issue we'll as have best there's nothing sit

be to we'll looking So forward that.

Operator

CNBC. with Josephs Leslie from come will question next our And

Leslie Josephs

conversations, numbers if talking about I the himself airports? safety I had Trump you at a the taking earlier question government, about you Are any, about had And about either is the Trump Federal CDC, also, you've with just go with FAA, for or like that just guys passengers the know can MAX Tammy, temperatures or anything today. deferrals? that? testing speaking over your

Gary Kelly

Well, the to answer yes. your question is first

with is And it's Officer is if effort security of checkpoint. Chief has, know Mike the Trade should America it's I talking to Ven, element has administration, about the what Congress be. for Operating the fair of of another kind protocols screening de Van think Association -- argued And our health you the leading the it are say some We at for members that airlines will. just advocate that to I security,

infect don't an others. have that could sick Just people sure you airplane making on that

So with need absolutely, flying anything kind I that's they And those that, get one And additional ideas sense. are be screening I we comfort. think way makes report to other agree comfortable. that to out have people of I thought there. than again, your to to morning what provide this some think don't

Leslie Josephs

But of checks the hands agencies would government in federal that federal some or that... the those be doing

Gary Kelly

the decisions you're we'd reporting discussed. that's and do? would opinion, of what my be to the have government question been I'm actively our association, is what that administration then a But I with does the is not advocated don't being scenario role, think I the think I to Congress. question what we they'll and -- up think believe forward what don't that's I members would federal and that take a your have perhaps we've again, trade that's any take asking I What made. -- that, answer. where Well,

screening lot federal advocating that long again, we're But I again, all asking professionals. it, think a assume We're And The not are. on. for this goes prepared the that be depends that medical Southwest, is questions how just government the of speaking obviously, to on same role. you there.

at So it that to natural done seems point. be very

Leslie Josephs

it for is And -- Tammy? is possible deferrals possible, it the MAX to

Tammy Romo

be happy you I'd to take Sure, through that.

that So were time then XXX Boeing, you if parties. were last delivery XX in we where at And look aircraft MAX if third we sitting had back that that take you deliveries. coming the there is quarter, we are were scheduled from to at another go to from directly point

we the So than now now next we Boeing end with no that aircraft is will between that take the more XX agreement have and of year.

we how of get XX. that's So at the reduction least

specifics still we're year. exactly now of again, we to on the working many So how would and with end the between airplanes the take and them want

Boeing -- keep our billed So recall, respect been produced. you'll have if MAX the mind, to that XX aircraft we MAX, of and has with in

worked to -- as planning to that discussions are with we'll details those we're point, those share so lock And And planning you. that not down, we're than ongoing. we certainly at Boeing, with through those so XX. we this take haven't less Again,

Michael Van de Ven

know I Boeing is remember, those -- just that either. know but the not producing Also, just you Mike. is airplanes today this Leslie, this,

tell would And you schedule they they airplanes between production a how and be next have so of exactly the don't available. end can year, many even that now

is together. part we What do to and capacity, with that's the So need how book. that discussion order production their the does about start play of what them

Operator

The comes Journal. question from Wall next with Alison Street The Sider

Alison Sider

Just I you state of negotiations sort there there's It wondering talk or and wondering was the there's if that's sort any bit? into of holding the of, solidarity of of various fraying about relations that right and -- discussions a government seem going if lot that's a if like the kind workgroups could guess, sense labor with now. with the up

Gary Kelly

if because there's lot there's Well, of the will. crisis, a -- a just not negotiations, -- the not there's of severity you of not of just lot

kept what to scenario referring unions. them them the kept and common engage employees. how up labor was come which all that what I concern our do when health been the on what We've informed of depending we've business. our to the about with is with to taking. is now are, We've informed happened well-being actions think about would severe we've a about and got that's they I earlier, I to think need then we had plans We've

have I are to place. so of that -- we there need concessions, we -- an conversations that that. in all on of those well seek environment taken where would And none like aligned feel But

-- I everyone to concessions. wants make that And can understand I nobody don't think

our to we're very to in that some I just exceptions, is make is just not get overarching relations, think going labor our sacrifices, and it people, together to very having That's to my to painful fault. And have in and message country, this. -- through the nobody's that few cases, the with people, work sacrifices. is reality. everyone But

hope the we here -- And set And want lot April. I've reality got is just through make And just bang is it's have prepared that we've to together not Southwest, challenge. for to those and painful get have sacrifices. think the worst. family. everybody prepared be for I other My a expectation, make shared that taken of we place minimally at sure the but that may just you. to of than with in pain, the it without all like we, so But here some bad a the this to pretty conversations are And fact that to try

do the right have lot numbers drastic I theoretical. the or going we're a obviously, to got in to it's are to sufficient that airplane action. here that they no So to else we've right got solid. if But and very very some mean, more when on comes, time not were. it's And passengers willing bills They're we things, -- are I now, we'll to get when of pay people to participants. lot relations I take, than different think a and believe our the need have

Alison Sider

clarity? Or kind normal there's little that more Is like on like any negotiations hold pilots? ongoing is with there all contract work until with a of

Gary Kelly

in is Yes, is that's But those think just it's do when all I make Tammy Mike's what and the to when so headline uncertain. with don't hard future suspense because -- is to It's the all talking for it know the It's is. really the to you yes, hard comes And plans Boeing confidential. really back the of about to future about -- future points are just everything of Boeing. future. that

emergency. think that -- that thing, everybody an and is realizes is Alison, So the this I other

care. So there is -- Southwest The intensive the analogy in apt. health is

pay later. attended clearly, -- of job be And there work for laters. want one things our be attended today. to just So got in What at that benefits. is are that things to terms the And and security of that's now. security the must can they've there's efforts, there's prioritizing and people that And least

-- sure we trying now, working plan plan have this, think And are right what will to then sure at a I it's this. once make and hard interested that's survive they later we to can just in, so we're about what get we're we make that a make we But be a and thrive not we date. -- through changes most worry to that to have we'll

Operator

David next question Associated Press. with from The The is Koenig

Conor Cunningham

But of you're and likely and elsewhere. And And some could have less customers you've off Baker's there comfortable long here to do Jamie how this this, you in kick also discussed more the again? example response but than will make would one to and you -- Gary, covered you things Mary's do how to book much about think question be full would you flying that? again flights? of to you do that

Gary Kelly

virus, terms know We need all who's the through Dave. right? -- who bet, think the defeat to virus. treat So I the just We people need of deserves. Well, country therapies need we going to in You a to need is get sick the things vaccine. we and of it's basic who that testing do

on front. like that. announcements pretty And be things Then up is is considered. a effort Tom -- soon some And from should left think much that us that And our you so there to are have leading distancing. customer I the Nealon you what's on within environment, expect it's social

social We seat things to So we to And do left every that address left X/X. the to do middle that. modify you're booking can if airplane can things to the the in accommodate our boarding would you be airplane. with within airport open, distancing. process And finally

idea a So as And load have factor. temporary thing. XX.XX% view that you I a

people just that. each of rest I that from accept I more, Again, we're our the going and feet other, are lives. don't X masked don't apart stay for to believe forever

But And to past And to about think one we've luck, we get masks, get effective for way we that with to until an I a think century. got social got this certainly, for we'll pandemic. think certainly. prepared be point, little and another have I that. won't we've distancing,

not for And that on are But extra it. by gotten we thing earlier, our low a -- other me really on doing seats high-quality, -- call I to we mentioned airplanes. should low-cost I our jamming cost in The haven't have airline. have never and shame Tammy,

them Dave, on to So it's going seat our of in that's work and again back a here. favor sit that the I'm if the finally, X to comfortable the think one to have And I just to -- to very And want that. traveling circling me seating by environment. seat, middle option I middle in do idea, granddaughters, with my want I

If less physically manage do restrict just just means policing So this. we we're and this, in it this to not other manage ask going simply men some that. be flight our we'll -- than we'll XXX% by to attendants bookings. on women taking We'll or

David Koenig

that, into seat, you to closer discussion but want aisle could in X than each don't They're in row well, pitch say that, one people all but back get I feet. from same Sure. to a other. the sitting

I meant holding why kind where at XX%, but like less sounds you it capacity that's something you're of take than -- thinking. that's wondered So if

Gary Kelly

month of that. But Where thought. to point, can't burn haven't gets just final we we my David, million determination forever. a same we the $XXX it, That's the kind a end X/X airplane, made with up, on is of back which

every some distancing we've fly, got of so just single thousands for to people right? between week, every have the have in to social April, of here flying day. people balance and we affordability Even And tens single

government is I to so what mean, us keep do the the has And that's lines open. asked transportation

So to need there, to distancing we're the going some in terms balance that airplane have some of find we experience. recognize but we'll

Michael Van de Ven

those other distancing is -- there deep you just are that just airplane antimicrobial. And of to things Mike. a David, program of with mitigation, the that is just airplane. that's form the got this I on a aware, We've are want and going electrostatic additional but one clean in of lot misters be the And

airplane. there be disease floating So that no will on around

just everybody same sanitizers I We wipes then -- to you the have or access to is -- on facing direction. forget in don't masks and sitting have personal have want good will everybody with that we'll and And board. hygienes hand

We on have airplane. systems very sophisticated the building

like those just So it's airplane. around viruses not the spread

our and And with social through in find hygiene facilities and a we have airplane the thing with place be respect you'll then to that see a environment. exceptional set the they that I to to as for goodness airport same think the you the our that's through for to really think some environment And go bit go pretty if customers. I way just cleanliness So just it. employees the additional as a customers to little of disinfected go up availability can personal the is well environment our distancing, enhance

Operator

Gilbertson come will Our from next with question USA Today. Dawn

Dawn Gilbertson

mentioned at you bottomed first the April. you saw the of things out call, week -- Gary, of top think you

third the You saw Can or and see they on us of you had it, restrictions? gradual there's restrictions seeing not feel week. tight maybe tuned states the give even Are And lifting never summer a uptick? improvement are from really that color slightest from these in month a you're scenario where like any any that, is but to vacation Southwest now, it season to summer set Does vacation where related may significance? any season second begin.

Gary Kelly

first to Dawn, your that's all proprietary yes, information. Yes, question,

points. we'll team one the temporary vest. And things So to just very is keep route our doing can otherwise, But future want really that that what we help do strengthen there's changes close the of and and information seeing that looking make, are we that if make some his to Tom will strong the to we'll exits that.

Your season one. good is a summer question travel

an have place July just as example. We for bookings in We have idea. decent no

no the very cancellations have for And will X be. obviously, vigorous where last been We to weeks. predict way they've

So we that's a have. question that

country July, up half August up. are for sort stay-at-home more be opening If, a demand the of opens have company the are orders. in watching relaxed like there we obviously -- fact, we'll about, or -- that dozen it's their Businesses about, states back reading carefully. June, hearing So the

do more position I where think that, that, go get they there. fun I that a when to confident will can and hey, put vacationers somewhere in be can there something be will I

an They example, believe family they've and as my going July one to in for use to And been just we're vacation. sheltered I beach I'll we're that though that in determined, determined even of they've very So they got are place, many. are the all cautious.

remains things have Tom, So that materialize. be than up acceptable distancing, other mask and open it describing as right be are Tammy have would and the no But and Mike there's cleaning to of the just vacation. or you not kind that be any thoughts? all been and going to say and that that Tom I will to traveling far social people. people to for whether But and that will steps there's won't as that extrapolating that believe no now evidence seen evidence current,

Thomas Nealon

X X just thoughts. guess, I or

Gary's for gets -- tend than need And booking really booking traveling. to bookings X, workers of just markets of from. hotspots the a other people be the July. X tough decline, to really point The or kind the is have so cancellation seeing travel more hits, kind to where to kind I It of cities is to XX then a it's what opposed that's look we that's said, there's coming a be until is your In June, like. think time, are is to to does of more terms that. and out obviously, barbell COVID piece Up where of had specific like that, right. we've which going And that curve days the But seen curve curve that tends a of you question -- which beyond, the what X nice X, to be booking any as XX. X pretty spreading we're what I summer question, think

to are. to and the That's April, here now right? not-too-distant May we in pretty and anemic, So that just just is begin time demand frames wait booking have be will we June, right future. But self-evident see, where and for in those

Operator

And will our today Slotnick from last question come with David Business Insider.

David Slotnick

seen Everything leisure. going you've Gary, Do to travel the recessions, you see is slow I reading is this return. probably X the years in corporate in very take the that think, I'm you that call, about recovery travel in think said relatively agreeing in past to case corporate during that beginning earlier a than travel during events canceled company's beginning that be meetings at return in just employees because because be might of this? COVID, liability the way least corporate bit for longer being proven feasible it or return of a that to of work-from-home been fear having a travel, has maybe their obviously of

Gary Kelly

corporate, effort Yes. big I mentioned corporate it's going The and think we -- we was really our companies, is think Tom only the thing to say when earlier.

of industry. about is us thumb rule for overall, we're which and X/X travel, the the referring of of to really business So is traffic the traffic X/X for

ways. can argue many I think it you many,

large matter to back to a those that lot are have travel I and because conventions. lead would things in business long -- meetings just slows a events be lot large of come is slow and a that can for the plans those of really going therefore, on travel think with -- world of think or time, suppose you exactly would our like. would company, to own XXXX I corporate that kind be for And we that I and going what it's that And know commitments. I to mean, people think making host, down is hard of making be

of, people things that sort XX -- "be possibility. again, that months, XX-month time read normal."And that's are I going wouldn't to I that But to by an in discount horizon. disclose wouldn't back rather predictions I

the And to one -- don't using for believe employees Again, I you've predictions, know. based people be historical direction. feels ourselves where and would this any and I to and to scenarios. it a history, think to why period think just pleasant are meetings, business don't downsize, we I don't not environment, is your in long a got there's like that. Zoom with precedents, will all guess. is react do predictions the But be -- of could to put pleasant, effectively that. not it are a these This be we're to And which I earlier what in forevermore like a that. is trying way thing, just we'll I it's a feels And it just If we're we me will If do I thing is do you And businesses. think of travel. kinds change I position And need on share either that in think are making examples can ordering think, I worse. need we'll to recovery that, upsize, just companies know of that one but we recessionary trying for there's was lot intuitive that I be that I main on able there's their that be. think will to point, less that

sick to tool I And these people have. Zoom think I'm people face-to-face. to if ready that more go you're of one I'm like me, talk it's just calls.

but I prepared very know, don't certainly So we recovery. don't for -- we're a long

Operator

back for the like Rutherford conference gentlemen, Ms. would Ladies question-and-answer to I turn remarks. to and this our over any session. closing concludes

Linda Rutherford

being Thank Chad. Thank you, all with you us today. for

you help questions, to if the out. always, you follow-up any team communications have As is ready

You newsroom, us can Thank or give us media all, call a www.swamedia.com. at much. visit our at you, XXX-XXX-XXXX very

Operator

conference The presentation. for you you. today's now Thank thank attending concluded. has And

disconnect may now You lines. your

Southwest Airlines (LUV) 28 Apr 202020 Q1 Earnings call transcript