Southwest Airlines (LUV) 28 Jul 222022 Q2 Earnings call transcript

Company Profile

Participants

Ryan Martinez	Vice President-Investor Relations
Bob Jordan	Chief Executive Officer
Tammy Romo	Executive Vice President & Chief Financial Officer
Andrew Watterson	Executive Vice President & Chief Commercial Officer
Mike Van de Ven	President & Chief Operating Officer
Linda Rutherford	Chief Communications Officer & Executive Vice President-People & Communications
Savi Syth	Raymond James
Jamie Baker	JPMorgan
Duane Pfennigwerth	Evercore ISI
Andrew Didora	Bank of America
David Vernon	Bernstein
Scott Group	Wolfe Research
Brandon Oglenski	Barclays
Sheila Kahyaoglu	Jefferies
Ravi Shanker	Morgan Stanley
Alison Sider	The Wall Street Journal
Dawn Gilbertson	USA TODAY
David Slotnick	TPG

Call transcript

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

Operator

Good day and welcome to the Southwest Airlines Second Quarter 2022 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. After today’s prepared remarks, there will be an opportunity to ask questions. [Operator Instructions] At this time, I’d like to turn the call over to Mr. of President Vice Martinez, Investor Relations. Ryan ahead, go sir. Please

Ryan Martinez

up Officer, de based for expectation Thank Executive we actual from and President and results moment, our our which performance earnings results, Operating quarter have Van Andrew for few from our quick make will open we today, Officer, Jordan; and non-GAAP with us and a items we for that you joining will well. our and trends our reference had CFO, it substantially then Chief Chief call. and special Ven. reminder Vice quarter share CEO, prepared on Commercial second which Q&A. A we Vice in President some these And we forward-looking me statements, all we second Mike will as non-GAAP purposes, remarks expectations. results for and Executive and In President excluded Bob just are could Watterson; differ current a Also, Romo; our future Tammy our

to this to with Bob, from for over press turn release more our that, and please refer it Relations So information. Investor our And morning I'll website you.

Bob Jordan

increased versus QX and $X.X record cover capacity XX% QX particularly all-time down an the second the about QX, still in will March, was down joining revenue Ryan, the positive off quarter trend change us of you, XXXX levels appreciate we're we think said, Andrew managed of any travel demand difference X%. by about encouraged and loss, in we XX.X% I that optimistic revenues. expected are to quarter's revenues That still morning. and experienced thank quarter, you a I to net can Well, but despite us revenue operating that what details, Well, first billion, summer business the surge this June. Coming everybody don't a make. to quarterly will travel demand recall in in

the Southwest We job well also say $XXX congratulate net them and at people I It quarterly progress not special produced you last a together. huge a because want an just to is items income, an to excluding It's Airlines all-time record incredible of on of thank to done. million. very I from turnaround all quarter just for made we've mention year, them a that ago. just the want to

demand forward, be Looking to strong. continues

fuel in experience and remain moderated and from have but remain to continue QX. lower and year. recently, to a both our We productivity we most inflationary high, pressures efficiency. importantly, on But here Energy hedging bit gain for another meaningful we expect headwinds have this prices plan largely

Our progress, remains our be people We all XXXX cost to slightly our overall ahead on in and of. made proud plan tremendous pandemic plan. and of our the stable. of in remain lot improved. just their our much to point We've capacity this operational We're for I'm recovery. a have thankful getting is us reliability staffing extremely efforts

lot of any and strand based and there strong demand of that and us a unforeseen out all that business worried far, indicate so remains slowdown. real, recession. pressures and haven't seems COVID, points could we impacts material our that but seen who noise events, business. data about quarter potential admit guidance on a there are of a are our Consumer inflation third and there latest signs is this is It I'll excludes they there's someone outlook Our now. has are out right But sentiment to current know down, significant of early

have key remember going you've many priorities Well, out. share them. coming to if recovery times; like lagged needed. our midyear of a be list lagged into I'd typically of and on of impact It's helpful to revenues have for progress As that we continue me always, terms ready XXXX we'll each monitor historically our recession, respond we to environment in and heard the to to mention

report First, in our which staffed that just reached May we to getting I'm at people. a XXXX, pre-pandemic properly really staffing levels proud is focusing huge on milestone.

hiring employees due in out especially the to We attrition. that the our we're in specific on that particularly for of are to continue pleased we We're now contributing areas, employees XX,XXX and the impact training this of front season in, and pilots, travel busy have hiring over given been add thousands seeing new year expect of airports, line. be

making Second, efficiency. progress reliability and operational towards historic our

in down flight thank amazing cost capacity returning and to inefficiencies I moderating ringing optimizing the overcome improve hard our our improve our our our new and XX-plus at historic cancellations I percent has schedules, want crew to been XXXX, next efficiency travel were which operational better returns. on strong, side, year. focus between detail, flying getting their partners But Mike but to our for we operations we and getting benefiting from walking again, to administration completion more in the plans, front June the and less just April thank as airspace May adding the challenges very do want flying hiring, that than staffed, as the flight and X%, laser-focused short-haul of we will stability factor. levels since We performance FAA as and in the operational out to on working demand we're line, fleet on a bases. and are and end Our efficiency continuing training overall and more employees network means to better we've for reliability. to the staffing work, people got provide work on adding more through by continue And to cover know to

employees I'm service legendary hospitality. of our providing Third, year. customer our very people and our proud advantage this for restoring

I'm announce credits continue that's you a by expire also Airlines no fees, see I truly pleased our change fees, other. employees just to credits, get get And for e-mails, care terrific I appreciate benefit, that flight flight we customer on low-fare and traveling to taking our we Southwest that that and I new when in number yet easier winning It's continue stories, all an customers are and all they adding experience flight points what marketing combine for day brand every of the rewards each ranking a May, even to firsthand regular about our and be policy. great with for DOT's the very through to do in one no the I don't and more don't service January for customers. on carriers. it's rapid customers. policy. For make transferable another credit expire industry-leading customer the basis, powerful combo out I each bag field our

is our QX the and COVID-related currently profitable years. hedge, While to most finally, year consistent there we We funds onetime would just two for this fuel quarter. is protected returning and cost for We in XXXX. September and for profitability. well reported revenue extending that we immaterial of the a the full cost, stable environment the this are have the to QX with and record that expect this impact earnings And remain had to we've and expired over expecting it's really beyond be QX be

as aircraft we Despite is X. delays through Our planned, good to are hiring. main in about gating March feel published to factor pilot which deliveries, future flight ability fly our growth currently schedules our

It optimistic current capacity I'm XXXX. do be versus early in find is certainly to first about we outlook or And still that for can can forward. to going republish schedules we need is Our avoid to a but for that, if for XXXX XXXX. continue up ourselves very quarter position XX% first capacity, to quarter trim we that

I you to to I keeping December action. our law for to just employees and their planning huge just the time with currently customers our efficiency that, at and, we're our one Thank levels, And professional are in So the TSA and fault want just thank to and XXXX you everybody stop for incident which swift a we'll safe. taking our turn thank going for Love involved that. for worse. outlook of this say at had acknowledge of currently quarter to schedules, to will thank all And being earlier with And from we particular, I'm and Last, for over beyond for this regaining our week. out. that managing I each to customers enforcement want at want published we're but and I is the Luckily, great assailant care planned our grateful focus very share take employees it it event to just XXXX Investor turning Day, you other. a historic very, just Field Tammy. Xth.

Tammy Romo

and everyone. Bob, hello you, Thank

performance and operational yield coupled quarterly record capacity, efforts operating our a employees thank excluding demand First, quarter, I'd and in despite The and also for $X.X in financial revenues drove net like which with quarterly million fuel this revenue of pressures. resulted solid of outstanding income, inflationary environment higher their special $XXX surge, strong record performance. cost items, constrained resulted to The record billion. record

important tickets recovery. timing expected of during of of the Omicron posted trends comments and an milestone also pandemic revenue wave. margin, to go beginning including which the our in to a unused. a of Andrew that want caused have was excluding cancellations We I extremely The quarter last an and around, revenue degree, flight with but levels. for XXXX, we to recognition year regarding minute, why change along for exceeded an XXXX expire, don't and year policy high quarter strong few made revenue speak our flight customer make operating credits number impressive this XX.X%, regarding lesser pandemic to will breakage even the items, a special second All a this

September. revenue revenue minute, to policy factored change expect million guidance. outstanding have record that than lower dates into the result in in our revenue impact flight were Today's a we had would be will the in funds cover impact we will we to set quarter that We large currently for but expect in change quarter, third breakage more sequential to part significantly As than eliminate range. to third to breakage unused result we in COVID-related $XXX which $XXX policy expiration funds Andrew revenue to for a credits expire in due third travel million quarter in policy previous our to the the result, the under lower normal.

look policy quarter, to be percentage beyond to a this change breakage any ongoing back to quarter. impact we from third is pre-pandemic levels we of and revenue immaterial expect beyond as As normalize estimated this

Our in and costs well. people fuel our did job, performed very a great hedge managing second quarter

million $XXX a fuel increase uncertainty volatile offset the significantly surrounding fuel price saving second moderated in given the bit in have jet hedge market the lately, still the our they geopolitical of current quarter climate, fuel XXXX, prices are us market regardless elevated While expense. continued and market in

hedged XX% quarter of quarter That are in more estimate in includes quarter We and our an estimated price. fuel $X.XX $X.XX savings $X.XX million third third price hedging gallon range, quarter be slightly per alone. to the of than $XXX our second for third cost represents to which gains, below fuel

snapshot a market fuel our fuel Of cracks guidance move and a basis. prices course, of this on at jet daily time oil a in and materially is point can

We continue benefit approximately full and to of XXXX fair $X which assumptions the in XXXX The quarter hedge hedge previous bring on second this shifting release, value CASM-X million. benefit hedge based look billion estimated portfolio. costs, a our roughly compared costs of fuel is value year the Taking maintenance second roughly with year. fuel quarter guidance of into to second the favorable in our $XXX XXXX non-fuel is opportunities cost outlined at our due year XX.X% and to up seek and fair and for was $XXX our market earnings beyond to at at our lower-than-anticipated price and fuel XXXX second XXXX half half expand market of million, would some of to this range the our

plan, roughly full primarily to half to XXXX in quarter, adequately staffed continue our of we new third our line especially with compared I our trained, higher than to get and of productivity we are headwinds CASM-X CASM-X benefits environment, in track to pleased to remainder our non-fuel am and XX% employees third levels with remain remains XXXX The we this while rates with increase increase to cost inflationary from XX% by levels. levels labor, for be capacity with levels. estimate at currently be XXXX. to airports. our Overall, as on that unchanged quarter year compared driven in the XX% XX% CASM-X increase guidance that to For pressures, is operating expected at in XXXX continues work and attributable the More when range of suboptimal

into in labor work reminder, environment. our groups labor accruals includes estimate Xst, taking all for best account beginning April a this As this

to Turning our fleet.

supply first All with now aircraft March expect through aircraft XX in of have half and our will current our XX of took fleet, aircraft -X third as expect MAX in in of our challenges of aircraft a plan which this to of this year. currently a MAX -X for chain total aircraft XX quarter. We MAX this year total any Through XX as Boeing take next expectations -XXX revised to published XX with and year. year the -X to schedules delivery of aircraft the of well the aircraft that XXX we We MAX due supports deliveries certification. currently year delivery status year. this -X estimate not year, is dealing take of this for we and aircraft, delivery to deliveries X We quarter the fourth do the retire flight end

We fleet have details. additional press information all so release, in I the won't our reiterate

that for year what with book this options including will but providing our think we recent this see XXX estimate MAX year, our deliveries, discussions are we contractual still you will best Boeing. You reflects we receive based on order

and assumed with that receive planning continue this a of MAX delivery next. year, XXX than to the XXXX MAX on year we sheet, we working aircraft -X our of of billion investments on our cash guidance we with lower this XX guidance quarter billion, X will updated Boeing previous our the aircraft. ended On We and the CapEx lowered assumption total billion. balance focus short-term our have $X with that will approximately $XX.X Based

covenants, We by also to and us. our billion no extended undrawn remains fully line to and two of years our it recently $X with credit available change revolving

leverage a position in cash a manageable very net are We at and is XX%.

by only airline all which key an with remains We rating investment-grade US continue our one agencies, to rating of the advantages. be competitive three

scheduled year. have We this of for payments debt remainder modest the

been with have repurchased still opportunistic notes, year we $XXX our in far have so million $X.X However, this million and billion convertible and outstanding. $XXX some of total

in restrictions payroll place end reminder, a the on quarter. share support As and until the of dividends remain repurchases this

been XXXX. priority, future to drive and always, we as forward, with business planning will plans our as the in pandemic, evaluating surgical allocation As capital in And board to be began Throughout our we capital growth scale for value. our as growth. of we move for decisions continue we've we the terms future intend investing in we

down We we opportunities may be will we faster continue and will leverage pace. reduce continue at paying have our to can and debt, to a we opportunistic where

outline returns to plans of committed and in year. this excess our are we ever, generating As later of to capital Investor intend capital, at on capital cost future Day our our well

pleased So am more very closing, quarter with results. that. our to come I on In second

and that, into Andrew. the have it turn half have year. this Bob stability With better of As I plans we momentum to over on will good second with our remain year, track this mentioned, heading

Andrew Watterson

Thank on for I'll additional trends to our some you, our more color outlook, earnings Tammy. revenue QX and QX point and detail. provide release you

and $X.X first we revenue. was the our Looking trends in surge strongest load and March revenues record business demand month to our terms demand change in significant March. Managed revenue down line of which to prior at was we June QX with down improvement we was revenues in a quarterly XX% improved notable QX guidance. factor and in yield June. a Leisure from Each XX% up as QX, also business than compared in all-time versus the QX began performance XXXX, in experienced XX.X% demand. had QX, in to robust, in operating represented of revenue stronger monthly saw billion, in history, travel in

business revenues While levels, QX. below were business XXXX and managed overall above throughout business passengers remain XXXX fares

be co-brand incremental Our from last revenue our continue an and end sales overall pleased contribution. all-time secured performance continue cardholder QX QX loyalty grow revenue assisted the retail of by of credit quarterly spend with revenue our XXXX, program with at agreement its year. loyalty also Chase we to card for versus and significant to very that and was our record, program which we size portfolio the represented

and our markets Hawaii, by cities did new to as was we Hawaii the flight well, performed development and aided Our made Mainland flying. which modifications schedule

initiatives revenue successful were customers a our with teams our Our also Plus was and Wanna new I to we well very to results. want And in rollout. the Get strong metrics. told, responding are performed and offerings. launched we across May. And congratulate fare well, All expanded QX product all fare on pleased geographies our Away

in results flight no the change customers or flown morning, beginning credits today, from this you Previously, to future. within had Southwest will cancellation, a originally longer one expire that release As credit the our any for our saw their be purchased flight in flight ticket. year date

are on were famous travel Repeat business our for unexpired, and key industry-leading expired this also their model one customers the the early eliminating our customers issued and including any of valid are travel expiration currently offering flexibility by of across is a that brand. We it the have as and success. flight credits credits those engaged that is coming cornerstone would date We're pandemic changed And tell of the September. board. us purchases differentiators our customers in

it than has move, with clearly The industry are is Southwest our proposition of more that this to us Our regard. important the commitment us research Airlines. has the leader deepen ever this in the important unmatched become customers customer to value our and it's two Therefore, greater with tells past to we even doing and business customers over flexibility flexibility and feedback And for years. been. to ease

but current coming at remain off Now QX, performance, trends peak demand strong. looking of we're June's

bookings, yields business mix be business remiss, the especially in quantitative half bookings the revenue trending August didn't to are encouraged hand load look revenues pretty Leisure industry QX. Included summer this as with are I bookings X% strong bookings business are XX% business QX down off would and to we with at if although both that our external trending expect leisure for revenues of is also with XX% as travel. the early yields from our is June. cools still we said, second closely. expectations. we a point, managed on seasonal XXXX. and experience sequential to and for travel overall in booking compared improve softening the to passenger and that operating watching post-Labor by Day at And If demand we leisure July QX and are bookings factors. the business, very peak in I anecdotes continue business XXXX. curve, back two indicate QX QX weakest of month. it's expectations We month mention in look we're trends and pleased of there at well, demand compared are guidance data line seeing Business -- off versus and QX are expect we That to XX% we the leisure seasonally the currently increase of headwinds are with is

QX. dates our with policy our sequential a flight change to five-point And credits, headwind a markets on headwind we secondly, network in two-point have due restoration a have we our to impact. focus mentioned one-time First, is from remove which Tammy short-haul to due expiration

back terms we more this business until to benefits utilization already headwind getting of recovers in And is demand believe is temporary assets, but fully. our is revenue operational full reliability. restoration network to Our of important providing

capacity QX QX expected X% to XXXX. roughly QX Our is is to capacity down with versus and QX be our flat X% XXXX,

and versus we is plans, March And XXXX. QX flight XX% is February Our on a capacity XXXX current published expect increase through X. basis, currently to based capacity flat February schedule and XXXX. On January XXXX January year-over-year to QX

we you our an still to that capacity. process, early are idea planning terms begin of of We expect where in but the in gives year XXXX

to the restoration, network XXXX XXXX, end versus on guidance and be year of X% terms capacity we In year. roughly full continue of XX% expect by down to this restored based our of

are this vast half it as of to in And in least until over won't XXXX at we the network cut to Mike. turn levels with continue we city our rebuild to with line capacity second majority the the fully pandemic While end growth. during of XXXX that, of year, flights fund the I'll be new restored

Mike Van de Ven

Well, thank everyone. Andrew, you, and hello,

in the significant middle of to a season We delivering busiest are several travel progress experience reliable our to we've making our experienced years, and in customers in stable employees. and travel the we're summer and

the quarter, and hiring roles. their employees initial day-to-day that's their to and are continuing. into impact in began complete as momentum our Those move Our additional training they environment beginning first build operating to respective

busy earlier beginning efforts, scheduled continue rate Southwest Xth as about in the new the know than hires, cancellation as we for of stabilized performance operation news, our through forward. modernization May year, the XXXX. operational heard July our the Our combined and of that with travel you that's the From that best reductions well I have the ongoing period made X%, since the we was on as all less

over that primarily performance that by period, was is it's on-time as measured operating while our the DOT, expectation, below XX.X%, problem. same tempo certainly an and Our

heavy factors, air of line XX our hires challenges is in that to If new well sheer work, by minutes, number as weather impacted and from with levels. load that's staffing. within as tempo measured the pre-pandemic performance XX.X% would historic and was just starting being traffic improve the on-time Our control environment airport XX.X%

there pre-pandemic, that today's nearly of So XX% pre-pandemic delay were terms, operating they of like in that about have XX% practical day just the X,XXX that in are in flights a wasn't periods. a flights our but means XX-minute almost environment,

solid schedules all by of we're levels. towards balancing staffing. we've at with made capacity pre-pandemic operating doing accomplished results, and nearly flight our that that historical progress So We've

was when About provides staffed since XXXX staffing overnight with active flight improving our terms us XX% -- and options employees any support operations to in markets have our flying. deadheads hiring more continue had operation XX% staffing up or we've delays. we levels nonstop focused is and It's we for those experience X,XXX remain We've surpassed the depth a this our and reroutes short-haul orient imperative of We're Our more all schedule end year, of finally, over to all in our May. weather crews flying and more We're and extra and customers flights in of airport ATC were staffing crew of of the and active in our going adequately hiring. business more we on support the and flight more of things our our and unplanned improved also in environment. that stable flights. quality employees. added both And the about crews. last we bases between And of those changes operational of the

our overall levels foundation continue recapture provide believe going improve. operational training. we the improvements, other to And I thoughts and are network our hiring will on our combined As historic continue couple operational to performance believe that and to a of our restoration, to efficiency I initiatives, more those productivity. with return that just

and the as rebound move training for company-wide year, shortages a the company critical was pacing year. and factor in the from most to we pilot this positions. pace and hiring restart been the and perspective, forward. our step we began that's of rebuild first demand travel staffing our areas, augmented from record organization as line front bottlenecks leaving just to hiring we've our And a had running As the our staffing to and at recruiters machine, last to We've supporting throughout

and into new focused so our locations transition now of year, has and intend the and that mentioned, point then growth Bob published year, a XXXX where we impacted COVID expect and our schedules network to higher groups we ready staffing and as by summer of be level near to add and still also but efforts spring get inactive seasoned of over of begin ahead at some to employees we're these those a restoration with will this we this So majority plans in And can employees. net buffer more XX,XXX capacity hires of illnesses to future, workforce. We're targeted The we're to our needs being still cover resume hiring a more build where attrition. occurred.

some still sick in Our rates of are work our elevated groups.

just the find remains in. we unique work our to in So productivity in build progress that getting by staffing top aviation is next levels the none we a that ourselves to believe that of end Southwest. priorities. some And cushion one prudent of year it's back environment historical It's and and buffer of all to of

operation. our to to opening So square very the and separate a note, helpful be Denver wasn't in able at I aircraft the grand second on our during XXX,XXX quarter, of new going foot to hangar maintenance be that's

With Denver. and the Hanger now now Denver, Orlando and addition of we seven have locations: Dallas, Houston Phoenix, Chicago, Atlanta,

DOT's the all thank consumer and travel managing our tremendous years. several past have admiration. Year-to-date them back restored deepest in And my my plan especially our does best, changing certainly line a employees, that the through the spot flight tech taking and a customer air They over respect advantage. thanks for but job, and and customers to to all sincere on schedule simply satisfaction solidly I customer is Our Southwest our people a want our are of not front for the care I have up least, fleet of top the of are report May, and last, service through each for in other. team those

to it that, back with over I'll turn So Ryan.

Ryan Martinez

Mike. you, Thank

queued analysts up for have questions. We

quick ahead analyst our a reminder questions and your please So to a Q&A. begin and follow-up, to one please go keep if Operator, needed.

Operator

you. Thank

Please Syth now the come will from session. will [Operator Savi first question begin question-an-answer We The ahead. Raymond go Instructions] from James.

Savi Syth

Hi, good afternoon.

of plan was the tent. hiring, pilot the here. quarter time kind about I kind know if pole long But give you kind to your today in of the XXXX talked delays delays being curious ability in really working talking about as plan MAX in of capacity? you've you I the XXXX. the pause on do at Just But you're you're of about a seeing that know one terms delays.

Bob Jordan

it's Savi, are Tammy here. is GE I'll change from and supply let Mike XX and XXX suffering like chain the Boeing obviously, and jump big But others Yeah, a in. Hey, in XXXX one and Bob, issues just everybody. to

because you through you we've sure is published did So in March, compromise through it our right X I'm doesn't completely unexpected. talked to good is March thing are aircraft not schedules have about, that those schedules. through which that I that excess now, think look if The reduction we

schedules the our fly customers, to news as employees. though. big number which for for able our be we'll So It's planned, good news a good is

like So if the we're terms long is all again, in to catch the to but schedule-to-schedule, plan. delivery contractual take you terms about it going in think take to how to this suspect, kind delivery going it of is it go to could catch into of fleet it long XXXX back takes how the the will I guess, up XXXX, of quarter-to-quarter, leak plan. feels up fleet, recover original

question, your which hiring. to Now been constraints, what which pilot is has well about

the leak up the pilots. a if late point could you if into the XXXX, you this continues that versus where -- chance constraint you becomes If to -- I deliveries actually into aircraft end think, delay to there's, get

late earlier. not be think in XXXX I would So that and

really you don't -- in stay the just we're we'll late and Boeing, But close speculation it's for today. -- XXXX. now, all with again, So year that's

after hiring pilot we'll our plan. keep So

Savi Syth

that pilot helpful. hiring if And topic. I That's might, on

think training or next Is of hiring can you're you're kind of should X,XXX move end. we think need of and quarter to hiring how last I you I going about -- year. as -- you that hiring around kind what training the -- Is pilot the capacity getting or top kind do just saying over the year? this as second maybe Is half the X,XXX and year. that and do, this you levels think for training and the you're you of Just with next know were kind costs into we that that's to that through of year

Bob Jordan

if issue, doesn't -- change you're change that all. doesn't hire Boeing we'll Yeah, at the it tying that this to

think, you, told We year. flight instructors. we So of looking there. instructors flight -- this were of, X,XXX We've We're of X,XXX roughly while, for a I'm on to we're I as yeah, we short proud to our hire May. very everybody. hired all plan

it's all training, the So capacity. the running at full SIMs,

to next year. think pilots X,XXX is plan the I hire about

remain delayed in we slightly capacity, XXXX. So it's aircraft if talked that even our full then we will about will because and these plan as they're like get

So our hiring change this pilot plan. doesn't

Savi Syth

appreciate Thank that. you. I

Bob Jordan

You're welcome.

Tammy Romo

you. Thank

Operator

is And go from JPMorgan. the next question Jamie Please from Baker ahead.

Jamie Baker

mean Hey, where the good I Boeing have to size, would This been of morning, seem up Southwest occurred. on you question. COVID will given had everybody. builds Savi's like in it overall ever of catch terms not issue, doesn't kind

about think where a XXXX, to time. make up see we accelerate don't So for could path I Boeing if lost

seems be so inevitable it in you and smaller that XXXX So forth. you'll you once planned smaller planned, in XXXX than than once

you take of now waiting for agree instead accelerate why surplus this, steps just shed not with capacity costs to If substantive more to here? from

Mike Van de Ven

this Jamie, is Hey Mike.

that issues certification then I've MAX-X. are there supply issue the Just thinking there maybe kind Boeing a them, way as to are related, one think delays production of delivery based chain that about about are the been are with on issues

So, the line, deliver just produced production has them able Boeing MAX-Xs, to yet. through not but

long, MAX struggling you we're that in a with it supply production delays the And as with will when get find no or that able and compared will as we'll XXXX certified, quickly that in where think better that to – is XXXX more a so than month X probably aren't they catch today. they're think then just be chain. I So their to up is deal I

Jamie Baker

Okay.

Tammy Romo

And Jamie, Tammy here.

the comments question to do here Mike's taken we back as on to Bob optimize the continue on on have hiring, on close but -- cost pilot the from other the in to forward, can, add through we move we already out Boeing, next best has -- intend year. best moderate that to we your We you Just as hire into pilots. But groups to and guess we'll information our capacity and is based year what we for this side. best around best

for our year. efforts we've So, kicked planning off next

performance with you inputs today that that relative to want the shared So that. be come up And flying. makes obviously, cost sense will that to into unit we clearly, all information with a we capacity we're the

Bob Jordan

now of we change. if now we things just way of if the to Yes. over flat. our at the here now about caught time just 'XX, here of in adjust And employees, have our we're Jamie, we the just will this, caught we XXXX slightly time. be have thinking proud -- about here, XXXX very capacity We time, along third I'm about quarter and you're 'XX, plenty X,XXX plenty same

in So, moderate really said, changed, 'XX hiring of ex-pilots some stable. we've to at our to for this running the at And this all here which just moderate back to point, point. just the goals our that And begin we'll is, half caught it -- begin now up year. haven't you're Tammy to our XXXX we'll as get

wring that about begin talked and Now pivot begin to our moderate at year. efficiencies goal is hiring, of historic to by next get we Day, the really back to to Investor we've which out the get to inefficiencies end our

Jamie Baker

types, really well. nonstarter of fleet appreciate fleet Very that this with the imply multiple Okay. costs relaxing traction as a single But on might with training rule, And obviously, it airlines at pilots, the And any union Thanks Tammy XX-year to for of drive. of. jumping favor you in in. seem raising type, follow-up helpful. would a as it because does I be a the speak only just to rule? have Southwest the

Mike Van de Ven

think basically, pilot around on much I Jamie, We're time, not an you point going have what it us energy be at would to And want. this all. our don't that that at there's in opinion would doing that.

Jamie Baker

Okay.

it. care, as agree. totally I everybody. fleet operator. single Take a just curious So was Appreciate

Bob Jordan

Jamie. you, Thank

Tammy Romo

Jamie. Thanks,

Operator

And the from ahead. next Evercore go Please is Duane from question ISI. Pfennigwerth

Duane Pfennigwerth

time. it. the Hey. appreciate I Thanks for

us XQ, of, about flight way underlying clean like, kind is credits credits, can any to periods. you look in help revenue XQ what the sequential there the excluding both think Just would on a

not You do brought you it the as pick up revenue can Southwest expect but quarter? fourth of like percentage just this you disclose wondering, the back you've were know, and XQ? a in to a issue, is in And credits that what up clearly, I'm

Tammy Romo

take doing I you're that. I'll hope Duane, Yes, well.

So well, elevated, But first when small pandemic even of been all, as it you're aware, a we don't it's revenue. still of disclose really revenue. percentage overall our represents the during breakage

revenue total terms quarter it operating to note quarter, third to still a underlying had be second would driver we without elevated revenue shouldn't of be the on the in record and breakage in expect material second to business the revenues impact just And beyond of trends, the have ongoing and quarter, trends sequential So trends. even immaterial, we the strong. were underlying very

in core the reported second be So our your we morning of it would starting of that you is terms to terms in for almost of up results this business -- in point but quarter terms trends, what revenue XX%.

in terms of trying just you help sort So trends. to through the

to impact impact you million So million, the really that know, onetime again, $XXX kind $XXX should of related as policy change. of look at to quarter you here third a the

Ryan Martinez

And separate Rapid customer it no want that this change sort matches perfectly free, in the do -- Southwest and about with deal. Airlines. to fly Duane, consumer -- I want bags to Rewards XX,XXX that add, you a because expire, things all you benefit, that on change there's fees. not of, a benefit flight points it's credits terrific Obviously, big feet is know

customer us. I'm So going improve win fly just to it's retention, loyalty free terrific for more did bags benefit. and customers and it's And absolutely like a confident added

big felt were up a address why period the there the many in to side, which to that, so like now a especially had against COVID of COVID, and from, changes September, piece the of funds expire On is and we early that were set pile timing. -- you we big of timing where needed travel we were that

the cost, to the isolated third this quarter -- XXX. the onetime XXX On to

break. immaterial just come going It's the and recognizing to mentioned we of you. beyond to used. back to to the on think really It's timing come funds. you be primarily to going back going they're revenue/breakage time. Tammy these it's impact that. revenue As That's COVID over Ultimately, could They

well. to fly customer we it's this be more If going shareholder to So bags but like absolutely We more issue, convinced, is a timing thing not And customers. retain onetime as and our win be do. third to right it's again, it's it's going brand, it's me, with thing I'm a the here. -- to terrifically of quarter a customers, lot a financial it's positive, and positive free just that a

Duane Pfennigwerth

a follow-up, as mentioned Thanks questions. but CapEx you lower. Thanks you I quick that Do XXXX, detail. as a is or already, and well? for could lower a your into And taking for bit XXXX see shift that XXXX if potentially then just apologize the it be

Tammy Romo

a Yeah, Duane, it year. is shift into next

well. up but the see some into those into then catch deliveries, we'd Boeing the a CapEx XXXX, as here we'll on if side on shift XXXX bit Now shipping hopefully,

Duane Pfennigwerth

Thank Okay. you.

Operator

America. And Please Didora the Bank go from is Andrew of question next ahead. from

Andrew Didora

getting then schedule, that XXXX Hi, to today. you keeps below it's heading limits your not do have into outlined your the a if CASM Investor time help ability anticipated types XXXX? delivery there you know out -- program drive maintain in order early, cost what And to but and would Thanks pushed longer that just Day? term structure anything I at of XXXX, fly for everyone. If out Tammy levers your

Tammy Romo

On Yes. year's this our -- from level. remains certainly, goal down for year CASM-X have to next

is work to we move aware. we to given little discussion as back a we you're on up as of input plans. forward, an will our earlier, around to expected So well bit -- goal. Obviously, going all But capacity we staffing haven't our capacity that that, optimize our

level. just again, So back to trying to get efficiency our historical

getting focused back we've underway along term, improve the airport And we're anything got So and historical over those from very to help our initiatives for lot -- on self-service range to modernization, from efforts lines. other of our efficiencies. efficiency, a those customers, longer

the network. of course, -- and restoration the think then, the just of continued I So

otherwise efficiency rate even -- to hoping should our if which to be will those get we help at we'll lower we maybe to levels. continue for were network, grow historical able to we So restore than back -- a have us

be expect to we course, be end June, restored performance we're about year, restored by of cost which, probably restored, to fully we work help our XX% year, to going and give by XX% leverage hard were of and as and really would next us operating the So this about year. next of

Andrew Didora

to believe material Anything said right Bob. seeing your there. second now? way your you you any want there which you your I among they discrepancies for seeing there? focused And any Is to out keenly and Thanks. to impacts travel? that you're Maybe the you're cohorts that business, leads call weren't question are seeing me maybe prepared different or Tammy. watching anything Thanks anomalies remarks; book know some out on just you income

Bob Jordan

And defer the more Andrew, here, the data. it's -- lot also just a because surrounding it's it's master of No. but to specific, whole I'll color, nothing to add

was across peak you if but the it across there. look So a the obviously, it the booking June as booking year, sequentially strength, mean, typically continues. is strength I -- at our is

strength just other looking at got really the factors. It's post-Labor You've Day.

as consumer sentiment is mentioned, business So, and down. I

lead are rising, You've to peaks you rates expect of things typically a that just here, seen bit the all some a slowdown.

in really bookings more out. add So, please we nothing our And that. yet. to it than color color, seeing that It's just Andrew, to call aren't because

Andrew Watterson

June. whether all we to And data, look peak a of guess that's that kind whether the same whether they of Bob point ARC all Hopper add data at website, or I'd credit that's industry substantial potential to card visits to saw that that's I Adobe peak CPI, or volumes, data, we in that, yields see still but we in demand, central June. the

And three-year June. are generously a up, yields That's they're on so, much fine and basis, -- are not up year-over as loads as all.

bit, little that's levels. softened still So XXXX sequentially it's but a well a of at above kind level

also encouragement lot high of So period. forward. period out a into of a leisure a high that going rotating gives business us We're

meaningful managed expect business to so and think you improvement We've the to of into really season. through that see so, we good there, And that that evolves October. travel sequential QX business a that that back trends. more that’s X-point obviously business through If so I the prime kind be guided will up be of to improvement question. in speak, how hold your will capacity, big August QX, for and half of It's

Bob Jordan

you. that all take thank you -- yeah, Andrew Well,

I into all that appropriately. We You context. guide got like of to want take -- always

take all guidance into your you account as about well. think so, And that as you

Andrew Didora

you. Thank Great.

Bob Jordan

Thank you.

Operator

David ahead. Next go Bernstein. from Vernon Please question from is

David Vernon

points, these the at you to with whatever from to in terms going of some to a return of driver call you're you about load ask bullishness XXX you're basis calling When out, the business expecting think just haul Hey, the perspective the from that of just you're is Andrew. business you're of flying that, square that I factor, in that, recovery markets, kind short travel. about headwind lower wanted flying of or headwind I'm out trying managed be in a high-density there. making

Andrew Watterson

development So, The off, planning the we worked to way that teams the fall looked would but put and from I'll start teams with in at operability of network be there. from schedules. and development improve Mike's and research our operations research what into planning, we summer

-- concepts, evaluated the so, mid-day All and innumerable jointly low some high crew-based that haul originators for was this stressful together some summer. up more a peaking between operations. came ground -- and schedule that of we then, And return XX%. we And specific more at talked from the recoverability with more operable bases short like to crew made XX% flying look Mike for about, crew

short revenue is the powered travel, make haul business by that of of kind mitigated. travel because Now, return really business of impact will

a plateau And you did in on volume kind see travel data, a so through basis mid-June. of ARC corporate

from get that we help additional you as to their COVID out on off burn would corporate haul short come had back get that travelers. and there expect and would they summer So, the and people road, put of PTO, accumulated recoverability was travel

so that insufficient demand be business travel go But this you for we business into short a as travel. level mitigated season that In vice insufficient of shows capacity. or versa. that months, It's may And level short-haul It yield the either some was higher you demand the point at in of haul business shows and just just more that was lowered time. for low can there through see load of factor. return heavy up yield is

David Vernon

how -- forward softer up I when think in or recovery? like there. terms think you maybe right, on that if the that up of When isn't decision do one, through capacity the the I can about demand of in a to sensitivity right in understand go about us how you keep that putting to think ahead, we end period, the the talk you it flexible are you look the and driver

Andrew Watterson

thing Besides is will a that restoration. network demand second aid recovery, it the

of being this short an imbalance restored You network. can creates think haul restored hauls being longer and not

many besides are on have though And content. content. situations our you where a short higher have we if so business point-to-point even a carrier, And content, having at flow you flow higher higher they look is predominantly there's haul average,

hauls and them we normally the in they kind find that having starving geography, not hauls, flow by the you're medium have. longer the so same short And with of

more supply to medium as seeing will go that flow, carrying business with as right imagine, allow now a the So, kind through in which we much balance if least at help fuller, and travel and as as we're then system might high not those add hauls long allows, yield. pretty X and is of pilot be flights

David Vernon

for Thank time. right. you All the guys

Andrew Watterson

My pleasure. Thank you.

Operator

Research. the Wolfe go And is Please next question from Group Scott ahead. from

Scott Group

Afternoon. thanks. Hey

I'm I sure So sorry, to back issue breakage make I understand just want to go this it. to

could back So, third if that? quarter this revenue, quarter, lower quarter $XXX mean we assume and thinking from quarter. this normal what run do or normal should add $XXX just to rate, for about just I'm million million then fourth assume seasonality from we to we're the third trying understand fourth seasonality take

Tammy Romo

what from guidance or You you take reported our would what sequential is quarter. normal third just for trending adjust reported results and our to a we for

impact. that onetime So, take you simply out just

Bob Jordan

out funds revenue just going to now time used maybe out that as just extended it's a it's period is going a liberate. to time, then period to recognized. play we've that's And over of those use -- their that's as over mean I play are not and over

Tammy Romo

forward. as the we forward It's as in simply revenue. That's pre-pandemic timing to terms go move percentage the of recognition trends right. just -- our then the to revert closer we breakage really levels the should back of revenue of And

Scott Group

seen I'm the quarter would have quarter this been this you drop-off and if have -- final then of would So breakage big this made of would this, had the sort have in thinking about been you not fourth change.

from this that of right? here. this normal you the change, starting see Is quarter drop-off so then go sort and you in You're making breakers

Tammy Romo

think look fair at that's a way I Yeah, to it.

Bob Jordan

fair. That's very

Scott Group

for that less Okay. I January, non XX% than you've or plan you know capacity? lastly, more hope the year. And February Would XXXX got full just think XX% next that or then, year

Andrew Watterson

think I is start the to Jan-Feb with, XXXX. to flat

first up the looking being I think at quarter XX%. we're

out versus kind XXXX we you'll up of once being quarter there, March the So get XX%. see first

a year, I constraining The back become point. get start. think over have of that's could as starting a element, half you begin so, good And a aircraft start Bob skis. or want either pilots the my to through mentioned, don't the least summer, to at the place of good least at I to both but year it's to

Ryan Martinez

availability sort Yeah, noise we're critical where indicator gives good so And XXXX yeah, yeah, the pilot of I aircraft. and hiring right much availability two there's But of again, you of now. fronts headed, in it think. and on

just going we're So to take it to schedule-to-schedule. have

Scott Group

guys. you, the time. appreciate Thank I Okay.

Ryan Martinez

Thank you, Scott. My pleasure.

Operator

from from Brandon the ahead. Barclays. next And go question is Please Oglenski

Brandon Oglenski

half off conversation about obviously, capacity starting in that up elevated how be in afternoon that should investors Tammy, on about XXXX. to restoration, hiring going for CASM-X in Hey still of thanks I the and my question. good so for braced guess unit first should think cost Because of you're be taking maybe following XXXX? inflation? front we network

Tammy Romo

for which are second Well, to higher that is airports. benefits you're began we labor are do remind I on everyone on incurring inflationary costs, accruing higher accrual rates, as quarter, April But rates that aware, Xst. we and labor, in primarily want the for

incorporated we second that for loaded in and the So you for the half quarter. guidance in shared that's fully third

will cost have around lower And staffing really we for to us do our be set capacity I from optimizing work continue productivity. pressures we that So the levels Andrew double-digit key pretty think a just was there now the for capacity through, It took growth as healthy up first quarter. kind XXXX, come with growth. which, through -- capacity of out you we're to

to So first that for is quarter. going obviously, help the

that going our staffing. through, to we're and the inefficiencies we to So network just -- continue to we're thing are as work main right-size restore the have

maintain and working really And our productivity cost is peers. to do hard that. timing regain to historical unit we're to healthy priority our our So

early together December our So to for it's year. that CASM-X. for you out drivers in We'll we're this guidance lay for plan we for first quarter give of those you inflation Investor when the but feeling key the little get full XXXX really are Day, here a

to have for hard So goal going we're optimize work and real to year-over-year. XXXX to CASM-X down hit our

Bob Jordan

and coming your everything XX,XXX-foot you sorry -- COVID, that we adding, retirements all -- early keep rebuild a hiring just ran again. Whenever all and of color the the little as staffing. -- to out you at with just And did, add but we leaves of teams,

the we all So lot. a were here for on sort X,XXX a pace been while a hiring month overall. of We've

You're going about a -- to we're our availability to so moderate hear hire the of between the aircraft. lot a gap there us was demand and because lot hiring, because getting much was the to talk now there of going resources of trying ahead

pilots tightens gap is So as point. that ex up, at really pilots this obviously, the we're, because

going need that, to get lot a You're hiring closer to hiring to It's going do us hiring plans, our again, see going us hear moderating are us to to you versus but sense. any work while that to ex-pilots. talking our the makes an about awful ahead take

Tammy Romo

more to gross the lose some ease of will more it, the do thought. as we back and network, well. CASM-X want longer-haul those Yes. And don't going to certainly just on of back bring our again, I pressure that one flights, as duration,

Brandon Oglenski

constraints? that. to really I on order is guess, I appreciate here limitation commercial mean, the computation up is it book, it of Boeing follow or pilots, three? Tammy, it or And all that, Is guys. I is

Tammy Romo

Today, pilots. it's

need We through fly schedule March. to our have the fleet we

quarter, needed. to shared we you last we aircraft with going what So really had we more than back

through walked that the have file Boeing, schedule adjustments end through that the to we here with with So we year. buy we that believe we our are of can the agreed

And we're to the it we as that we'll here on could to to from move deliveries, end constraint XXXX, hopeful pilots. the is possible pilots it today, go so fleet. catch XXXX, is And the up we as into get of but begin the that

precision than any today. just just -- you it's early we to So give that too more

Brandon Oglenski

you. Thank

Operator

And the next question Please go is ahead. from Sheila Kahyaoglu Jefferies. from

Sheila Kahyaoglu

improvement business down think, how to Is was down better in afternoon, that I ask Good revenues any think of in XXXX. to above wanted fares much Thank everyone. you April XX% managed versus breakout XX% there of way And pointed I to to pricing? the about you. improving from, June. volume the about

today? what think back it how you about XXXX And are volumes So getting sort levels? of to

Andrew Watterson

through really end businesses We was some in than and the had picked volumes March XXXX, of it June. skewed I say will government volumes started towards improving elevated versus Fares but -- were really and still education faster up that fares. were smaller traveling.

are our particularly you largest are side. lower lagging, Our kind corporates now technology who ones previously banking, top-tier look consulting amongst at that or the -- our on and the but they're those if accounts, They and just have their travelers And all who all of slightly less were travelers they are traveling activity, all trialing traveling. have are less accounts, our traveling per of unique largest our just than then, travelers account, before.

by but as that we hopeful company same people, here reason the the kind that's post-summer which what road. think more But account about travelers is they're per traveling So travel to on it's the varies get into of large number season get companies of have now, don't of more we out benefit right the is. these

Sheila Kahyaoglu

that's exclude Got it. mentioned five-point the guess, headwinds as scenarios but a potential short-haul how from towards retracting deceleration. some versus I extrapolate breakage, super that network, think deceleration into And the slightly QX? the in do and on helpful. No, think you we peaking And I the pricing and we that you June, environment to restoring about we of then how questions. pricing about there's wanted just up follow If more RASM corporate

Andrew Watterson

I'll part, but last start deceleration. part sure I'm got that, with about of the not is which I quite off the the first

from over to you year have have sequentially, secondly, be reasonable One load have and yields be QX have certainly to QX. to And think quarter-to-quarter. then assumption. from flat be factor a three-year sequentially would I have to flat RASM flat is that to

as peaked our As I well data, as our in all external of internal, mentioned June. through earlier, seeing the yields we're

and where a that's period leisure And so -- peaked. they heavy

at rotating essentially, leisure highest a fair certain we leisure there's fares. beyond where super travel, our same fare kind in how are level got it the less a And hurt seems and the business couldn't travel now And summer. period as will issue same then point seemed of have push you well you're fare certainly push who paying that high, but the level the travelers travel of redemptions fall like. And you can't because also so leisure to the volume levels back, composition much higher be as

me, business have and the much So, QX effect, headwind leisure go of we -- a QX you price and travelers a excuse elasticity business travelers you can't composition go higher. you or have to from because as have leisure this point where

a really fall. of not an a that's kind so from hay what's June. change It's just of change. day or moderation abrupt free this the It's And driving

Sheila Kahyaoglu

Sure. you much. Okay. Thank so

Andrew Watterson

My pleasure.

Operator

We have We'll Ravi from time question from one take for our last more ahead. Shanker Please question. go Stanley. Morgan

Ravi Shanker

new than normal a you comment on built have going is here you're it seasonality, yield have sort part of normal everyone. of is just the you the just follow message Also, Thanks. I if growth If as Good or like versus of or sense what a that? that last is Again, worse the the do baseline yield. afternoon on percentage better sense or seeing the can that what be of is of XXXX up forward the June can

Andrew Watterson

is trend, was of personal So part reflected speak. kind part so to travel that demand a opinion June that leisure my onetime effect, pent-up

And still so, we're seeing September. up July, leisure yield August,

have still be in curve. we So up leisure up And it do are of can that, to as compositional yes, look see a top and on they'll booking you then yields far effect. as then continue like our

where and higher. you pent-up have you we trend of how into question still the is rotate will composition elevated not of persist, be. lower there a an will leisure that leisure So but to back have that business demand And time that year of then a much businesses

we demand for on return that So travel. had of see a kind business ultimate kind yield of spring business to QX will that of how lot if acceleration a much the back of turn in we and comes

Ravi Shanker

it. Got

another the a facing a is good. lot call you detail so summarize Bob, And on kind of to quarter do CASM-X? into Is late this follow-up. maybe think it is your of months? risk six top a in next that What the a maybe risk of beating as of over kind biggest kind consumer the far. recession fourth drives Sounds Southwest operational for elevated of it industry up the a snap or line, fall the

Bob Jordan

it there's way. in tend heart, not The it's to I don't faint right? know you. -- things for of all -- always airline that think of Ravi, kinds I the the same front of industry, the There's of

I'll reverse of then go have come to your and I We here, -- kind into question.

just past where and at If you six the were. look months, we

on stable. gotten We pilots, plans. so want have but thing. we've stable, we our do So so to do much hiring better to We staffing but are better in work much Obviously, were with same gotten We've better, in shape. are operationally shape. we we

sub quarter, and than just X% record was record XXXX. a in rate June May cancel better We had Our operating revenue.

people. terms X,XXX really of So grateful from There's -- of getting to pace in many surviving to things just stable. the of for kind we're so being it's hiring be the airline

and move pilots, there's into thing do through -- other phase move question next and really hiring on I sort answer your no to now if click to our operational want but the horizon. though, you There classes. is really them, excellence things. filling think there's of into one back risk enough just we the Now But in we're

folks We full, have pipeline. the are are of full. a lot The in the SIMs classrooms

our all feel have instructors, good checked, flight that. about I We

that. have top new closely we from You really in on Boeing, and fly And working deliveries the this like with the end our can feel of day, at but we're schedule. Boeing of our -- we're I delay

that's reduction force thing, schedule I the is just horizon. the the customers. to thing on a our it's one biggest just going employees all not it's but not uncertainty and guess to which is just So the for been published, terrific

chain potential, in and volatility fuel potential a issue variability of recession on have still. you've and because and supply things variability a in prices, crack demand fuel, got huge got of those So variability you spreads all you've lot

we positioned. knows or who will not. well whether materialize thing those The good is, extremely So are

we the We people need. have

aircraft have need. we the We

net $X We have billion cash position. a

and so to have our way. We weather well comes we're leverage whatever positioned XX% --

given about specifically didn't but just So for I didn't you how it. I've I don't name flavor thing, I -- one -- a I think

Ravi Shanker

Bob. Thanks,

the luck. like above. Good Sounds one of

Bob Jordan

Yes, sir.

Ryan Martinez

Ravi, and you, have time everyone for today. we the for day. thank Well, I joining, the all of great a call questions. everyone, analyst appreciate portion have our thank That's and the you,

Operator

with introduce Rutherford, President, Ladies media and portion begin gentlemen, Executive I'd and People Vice now to like first Linda today's call. we our of will Communications.

Linda Rutherford

get to Chad, and instructions welcome some queue ahead the to just up. how you'll if call media you, Thank and members go give today. can our started quick We them the of on on

Operator

our Sider And first go from Wall Instructions] [Operator Alison The will question Street Journal. from Please ahead. today come

Alison Sider

those much. FAA you about couple Hi. accidents. those you've you allegations, that in investigations Could those that to to if wanted with what of and talk to a I about made changes released allegations last any you has incidents approach Thanks your to agree ask the about made so kind and assessments some bit of reports of whether little years the investigations? flight of responded raised specifically, yesterday, how the Southwest of and the certain

Bob Jordan

better a It's old sure. nothing – detail, Hey, information seen I've think a what the I from I'll Mike can then start give lot here, Alison, I'm new. of But there's and in stories. collection

in So we XXXX, we number is very took examined XXXX, the raised, seriously were think, FA-AOIG, published by I report committees, And February these everyone. the this cooperated et do. always' others Senate cetera, are DOT, a OIG with think allegations in that as I one. XXXX, all Safety

safety. We are very safe, always improving

just mind was a my wrap-up that I of this process. is think So –

think even there, came report letter matter end I is out acknowledged closed. it in counsel special at So that this now the the

what So I of some just a XXXX new. and essentially in XXXX closeout versus occurred think it's

has you to anything? a something – has versus do me, it's want to rehash before Mike, So – it's gone add just of anything on But that new. been that

Mike Van de Ven

Alison, Yeah. have group with every I don't looking participated have to anything we it. there. add into

addressed. every We have interested was to everyone and been one in of issues those it, have responded that

Alison Sider

that's ask the kind of you who hires in if one these new And mentioned just what months? the is, couple seen sort little I if between you're could get you and the the had just are and more. Mike, summer. a connection of of of their where in roles slowed like about bit talk connection all the Thanks. temp – changed where kind at seeing having things new what this Okay. operation last of all you Can down

Mike Van de Ven

Yeah.

so second that think X,XXX I you about think employees hired when tempo, in quarter. just the the we've So about operations ground

training that match So are you with the process in There's operating there, a of lot training, an think experience about equipment out the the and one environment up that, new an airport, or the when employ employee. tempo so you hire part is of necessarily and operating if out don't you there. the feel experienced heavy job, in you

work And ramp he in year has activity. all agent that a a Airlines alone alone or and so there can process Southwest been – the can is she work

you're hire, you're up paired with brand If someone. a new

bit. tempo that things are those and slow the the pace down kinds a just operating of So

just given And part feel hiring, the so all of we as have that you the company. just

Alison Sider

you. Great. Thank

Operator

the go Dawn next question USA And TODAY. from Gilbertson the from is ahead. Please

Dawn Gilbertson

Hi.

relates a Andrew, into detail it on could for you would your I more to as about policy like talk change question and -- I First you're cons just the and to maybe the broader. not -- weighing? Was Can make policy it if just this -- go it ever I'd you this COVID extend under credit consideration credit. guess some kind was was time, this get my you and from becomes would this, I do the get of easier for you that I comment to can whole thought to employees you credit. extend know you they lot -- pay get questions was a just and things It make trying all promise, something overwhelming aside could credit? travelers? -- $XXX brand people Thanks. offered this a your pros

Andrew Watterson

Dawn, elements think on to Hi good of I this. you're

Wanna as mentioned for flexibility this brings funds customers. has the it been Bob So now, over transfer We flight important. Get that credits. we that looming important to kind now more COVID, to it's like of discount see to becomes have like important why we expiration Away always earlier. of even of people. more But kind become COVID I refundable tickets you And had because But Plus,

their So for the funds. it's people and in have driver call they And more increasing. as coming desire now customer in, one call to about become department and number the relations been more talk for has flexibility customers our

added my of also point prominently the your in into account, balance it before it even you website kind there. We we put have

for move, -- this we desire with -- our so our and we funds brand. is to flexibility us elevated customers about think And concern led consistent the which of

funds, some and gives but so you could extend realistically, just And really that promise go customers. you to nothing

there's There giving go bring it you bags, hurdle no that, not say, that you. with, it be from they forever, been of for We can my that extended, timely you know can on people Southwest because for And Airlines expire. because, will out always fee. it. it will stuff. say manner, they and not message can in about be can they well, to worried If begin now never this a using all buy only know They can ticket top and is, change there A, that, is lower you're will and you of then yours I'm part marketing this to the market

in shuffle. extension, things those as just you might of go lost expire simple well all it and put have and versus together the a never you way kind gets So the which

Dawn Gilbertson

wouldn't small One worth it people to been shaved that. you or have give paid I you pay Do any can $XXX. on obviously, their have off But a it stats me having sense, if credit. how credit, have that any $XXX for quick how by six-month follow-up many mean, people, extension many you

Andrew Watterson

someone would a gap. I don't know times, it. that we've don't you when even a have wasn't It long a sometimes. it extend policy, just other compromise and extended I clear that was always follow-up. was had it if it, can maybe for like and maybe forgotten we multiple Many last it it track we times, free. And was times,

from So It but occasional a shows you it policy hard the just practice, us. and increasing it importance was of an not customers. the fast was

side for the so ledger, of will say we’ll to just it's and move yours there be other and always So it speak, the to you.

Dawn Gilbertson

much. very Go Thanks Okay. ahead.

Bob Jordan

were it customers and doing we we really want. We that need larger research aircraft. recently, our to to top, that power flexibility, to overhead how around where of And mind we are need need lots add, so really, is to of ability rises the especially do always to what that we're right us beds. our add Well, post-COVID, peace arrived the change customers That's the for changes, customer around desire on telling important. the there the add

around couple And rep so no customers. fees, many did transferability that And a a you taking times, within we're going fees, powerful because Wanna we And don't customers, points that Get really just new change from are mind Away our only with again, Plus the away not just peace now package worry fare. I change, to it's all like I'm And no with because rewards know bag new of fees. I've bag that said this going we convinced win policy to and retain again, that we this customers are of expire.

Andrew Watterson

that us, People we're powered also Dawn, flyer. really love I'd Thank us, a right. being come frequent repeat, Bob, buys on they you, add back. they And for they experience us, by

-- like treated economy a so a graph lot I that's to as airlines People done, And when that. one different. was well. weren't it smash think of or the like times, A a remember look at basic they something

they credit, repurchase. we're And so to definition, getting in this us. again, fact, the in this, will And customer, they a travel and is will environment, more a like come once repurchase by back

repurchase And consumer ours. all so powers especially what that behavior is businesses,

Dawn Gilbertson

the color. for much so Thanks

Andrew Watterson

My pleasure.

Operator

Slotnick David from TPG. Please ahead. will question be go Next from

David Slotnick

or since or share the of them, individual any number Wondered credits anything afternoon, anything on if number that's of unused Good colors effect overall Hi. for you the XXXX? value question. or the could just you outstanding to everyone. Thanks numbers have left maybe that

Tammy Romo

you that. is This Tammy. I Yes. can with help

probably that balance quarter, the it been of air second our the was balance. of issues the balance in terms travel at represented end have X% traffic liability In that what that issued, of about represents

$XXX breakage. a that call So million, net is, estimated and million between course, of of and $XXX it,

than air It's that of maybe maybe gives bit you liability. not historically -- a that, piece but ballpark. least been significant at So traffic close most our lighter the it's a little

David Slotnick

much. very Thanks Okay.

Andrew Watterson

Thank you.

Operator

And Ujwani the next from is ahead. question from go [indiscernible] Please Nahur

Unidentified Analyst

you give to you to that starting . doing Airport adding news Thank having for not? everyone. media that the a much the I service lately this. date in be ask XXXX. long-term or I of in love in to field wanted so part about ask DSW service Hi, why to Southwest to local DSW wanted able without talk will directly, to is area your plan, why expand

Bob Jordan

a gates we're airport, mean Field we the secure The obviously, Job first Love Love the adding at constrained. born money here. I rebuilding Dallas, basically of Field very And -- happy Dallas. the put Dallas love home. the off, and though, are Love in were is serving that is gauges, Well, and have there. We one Field, all to we lot we is Dallas that.

Love point, to given to becomes we to some that so want the area. difficult And continue capacity want we -- at the serve field. And see

you it's to capacity comment process. that general do potential could that just There look a a the you're more to DFW. constrained, DFW Love about generally as Field. point, lot way serve is area when in than ways We add have to conserve to extent Andrew, of a is access that are find that. add And to able want being it if that. to comment to is a But to a to anything really some a way one do Obviously, about to go right preserve the really And don't that. you we So, desire be at have – now to to to job we can. around anything that? will It's

Andrew Watterson

serve for metro it's Area, Angeles [indiscernible] Los We do in Basin multiple us. that's Bay area. common us so Houston, a D.C., the for normal Washington, in area, airports think that to I Chicago,

another for it population served Dallas. have place to would be airport normal So, us like large in we a

opportunities responsibilities One our is we can of to create more prosecute.

opportunities Dallas around we And so, is one of them. our of lots all system. have

are for the the right. facilities an and think timing not I point time when us it's is opportunity to prosecute So, but in material, the

Bob Jordan

Very well said.

how continue issue serve area. That's isn't DFW, issue really So at the issue stake. to the do we yes, is the the

Unidentified Analyst

Are airports two also not briefly. for What operationally you having noticed of for the Southwest? And [indiscernible] of able that at if out you've flights regions? of I may can things only for follow share up benefits some to that a you in are the some a but be customers, win-win

Bob Jordan

to want airport. generally go We our because customers want this reason for to to customer the It's convenient we the them.

flying Burbank of and part But it you're Denver traffic hauls, if LAX So in you're Beach when of the the really between California shorter Long from or difference your big get areas, Northern if fly not in also Orange is flying your across in travel you you or material Ontario. the Phoenix, then become perceive metro country, traffic these journey. part from becomes plans. and if And in a especially big a you can County may

that's you So, you're an closer to going. airport fly where to want

if end-to-end you these kind kind our neighborhood And so for of a airports, will, having customers of value proposition gives better transit.

So kind you're of the the customers. once our driver ground to that that's on biggest is convenience

Unidentified Analyst

Thank you.

Bob Jordan

We from We'll take last My one pleasure. Thanks for [ph] question. the question Sakshi for New our from have more question. York ahead. Operator: Times. Please the time Virag go

Unidentified Analyst

to landscape, if perspective able how on if anything curious you're -- that affect hear Spirit, affect I'd how sort guess might merger, think your you you. I Jet say thank already with I be just I addressed apologize about -- industry? was the to just anything the just this, if of Blue curious you've Hey, but the it could generally how competitive

Bob Jordan

with things. we these mergers with my overtime. did love because We You more We It's Southwest experience We answer But some things had purchased generally, obviously, ATA. overtime. just AirTran comment acquisition. Airways. we don't have

and what's whoever location. in once single experience it, compete with on think or a day is. opine just to going you we is about decade I not something Spirit have we So, about so here. Frontier happening how vigorously doing I'm to tell we're JetBlue. going would which every compete every with that anybody, and We

with need have the that We strengths. we themselves. our a best heart change to think low And standalone merged to what back have We Southwest that's, whether aircraft efficiencies competition Spirit cost need up deploying have customers. wake need is of single this beauty way enable And to every to Spirit I We competition serve a we have how low need network. we type. others like who so they or beauty is serve the somebody to doesn't with about do. our and And day need in else, to the case, We it we best Southwest. always that's Airlines before employees fares. And the think to about serve the of that's go

answer, is that who matter So to compete. going which my is, it no would be we're

Andrew Watterson

I'd to add just on And it.

new is restoring talking about reinvigorating heard probably rolling through out our our back call, the You've getting products, network, to culture. our efficiencies, our

control we So our destiny. own

estate. this we roll talked plan about just all own we call control and out, we So our

really that. don't someone someone we'll doing avoid so something. something own and prosecute to control need in we else So to to destiny, our do do industry We the

in that's what benefits Southwest Airlines. strength think you're position I you a when of

Bob Jordan

Andrew. Yes. you, Thank

the and control to and but back recession? can't earlier how too, our what externals, focus. So worries about. Airlines, control like We to Southwest can't ourselves potential there we you out our is here, all reaction time We them XXX% talk we manage about question, that internally the the

Tammy Romo

to up clear our revenues, when a come talked truly results, our while was we you sure still that as revenues to some to that remarkable. guide quarter back use performance. to third forward, do quarter in quarter that our our modeling we've talking, have commentary want I ago, you but noise Yes. to to to second want there a of numbers, make some all it's And XX% record X% is And XX%. certainly a of the come was lot X% about extraordinary just guidance I of And And on one were revenue XXXX. relative from years just you lot where just going about performance. were two just to they thought third our And think would

clear, really done out of you because information a lot know be of I today. we've to Just

it's far come XXXX. to we've about really how from think So gratifying

Operator

Thank you. Rutherford This session. the to concludes I turn back like Ms. any would our to conference closing remarks. for question-and-answer over

Linda Rutherford

with Thank you all being so much for today. us

you can any department you with day. communications have As our can great or up a at have www.swamedia.com. other usual, Thanks and follow if visit questions us you

Operator

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

disconnect. now may You

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.