NYTimes: AA macht Verluste, CO Gewinne & SW, AS

[BA917]

So, nochmal ein längerer Artikel in English als Sonntags-Lektüre:

 

So Southwest Is Mortal After All

 

 

By MICHELINE MAYNARD

Published: October 16, 2005

WHILE other big airlines have been suffering through a disastrous slump the last few years, Southwest Airlines has been like a speed skater on a dark river, deftly avoiding ruts and leaping over barricades that tripped up its less-nimble competitors.

 

It kept its employees happy and their compensation fat when other airlines could do neither. It expanded into several major new markets while others were quitting some cities altogether and reducing service elsewhere. It capped prices to deal with the intense fare wars encouraged by the Internet. It hedged its fuel costs while others watched helplessly as prices doubled in a matter of months. Most important, Southwest remained profitable throughout. And in that way, it served as a beacon for competitors who were losing billions of dollars and trying to retrench under bankruptcy protection.

 

Now, though, it's beginning to look as if Southwest is not immune to the airline industry's troubles after all. While it continues to have low overall costs and the highest market capitalization of any carrier, obstacles like stubbornly high fuel prices and more aggressive low-fare competitors are posing new challenges to Southwest, threatening its ability to maintain its momentum.

 

"There are clearly headwinds ahead," Laura Wright, the chief financial officer of Southwest, said in an interview last week.

 

Herbert D. Kelleher Jr., its chairman and co-founder, was, as usual, more colorful and more blunt. "It's all hands on deck; the ship is being shelled," he said in an interview last week.

 

Most critically, the hedging contracts that have protected Southwest from spikes in the price of oil will offer less protection starting in January. Paying market prices for a third of its fuel needs could add as much as $600 million to its bill next year, according to an analysis by the federal Bureau of Transportation Statistics. That is almost twice the $313 million profit that the airline made in 2004, and well above the $440 million analysts expect it to earn this year.

 

For its part, Southwest predicts that its fuel bill will rise less - about $500 million - next year. But, Ms. Wright admits, the airline does not see that much in excess costs that it can easily cut.

 

"They're not in the same boat as everyone else, but they're sticking a couple of toes in the same boat," said David Strine, an airline industry analyst with Bear Stearns. "They are feeling the same pressures as everyone else."

 

To be sure, Southwest executives are keenly aware of the challenges. "We're going to have to be aggressive and innovative or we're just going to have to lose money like everyone else," Gary C. Kelly, the chief executive, said in an interview Friday. But, he added, he is proud that his airline's record of 33 consecutive years of profitability did not end as the rest of the industry was falling apart over the last few years. "This is a testament to the fact that we were prepared," he said.

 

Staying prepared is now the key. Beyond next year's fuel bill, Southwest is planning for the day when things get even worse. The airline is already looking at 2010, when its fuel hedges completely disappear, leaving it with a fuel bill that would be $1.4 billion higher than in 2005 - an increase equal to 20 percent of its current revenue - if prices stay the same as they are today.

 

"That is a hurdle," Mr. Kelly said. "My message is and will continue to be, 'We have five years, guys, to address that challenge.' And that is a blessing - that's not a curse; that's a blessing." As a sign of his confidence that Southwest can meet the challenge, he has not backed off his pledge that earnings will grow by 15 percent next year.

 

Meeting that goal while being squeezed between rising costs and growing competition will not be easy, of course. To figure out a way to do it, Mr. Kelleher has pitched in his considerable expertise, actively advising Mr. Kelly and Southwest's president, Colleen C. Barrett.

 

While they remain in charge of day-to-day affairs, Mr. Kelleher is dealing with matters like schedules, service and how to deploy Southwest's fleet, particularly after Hurricane Katrina interrupted flights to New Orleans, where Southwest is the biggest carrier.

 

MR. KELLEHER is also spearheading Southwest's fight to overturn a federal law that effectively limits the number of states Southwest can fly to from its home base at Love Field in Dallas. Last week, Seattle rejected its request to switch from the Seattle-Tacoma International Airport to smaller, cheaper Boeing Field, which is closer to the city center. It was a rare political setback for the airline, which is accustomed to being welcomed by cities eager for more service and lower fares.

 

Without a doubt, however, the fuel prices are the most pressing problem. Jet fuel costs are roughly 50 percent above 2004 levels, and spiked an additional 25 percent in the days after Katrina struck refineries on the Gulf Coast. Both Northwest and Delta blamed the run-up in fuel prices for triggering their Chapter 11 bankruptcy filings last month.

 

Southwest's fuel costs now average $15 a passenger, according to a study by the federal statistics bureau that will be released this week. That compares with $9 a passenger in 2000. And the 67 percent jump came despite Southwest's hedging strategy, which locked in the price of 80 percent of its fuel in 2004 and 2005. Without those hedges, the airline, which will report its third-quarter results Thursday, would have recorded operating losses in three of the last six quarters, the bureau's analysis showed.

 

This year, when fuel prices have ranged well above $2 a gallon, Southwest has been paying an enviable 99 cents a gallon, according to the bureau's estimate, and that should help Southwest post strong earnings this week. But for 2006, Southwest has locked in the price of only 65 percent of its fuel, meaning the rest will be bought at market rates.

 

The most logical and traditional way to make up the shortfall would be to raise fares, a tactic that Southwest has minimally employed this year, increasing ticket prices by $1 and $3 at a time. Analysts say Southwest could easily charge more for cross-country flights, which increasingly seem like a bargain compared with the cost of gas to drive the same distance. But Mr. Strine, the Bear Stearns analyst, said the airline must be careful not to antagonize passengers, whose primary reason for choosing Southwest has always been that it was cheaper to fly than big airlines.

 

Ms. Wright agreed that the balance was delicate between covering costs and keeping passengers happy. "Our low-fare brand is who and what we are," she said.

 

Fuel is not the airline's only cost concern: wages and benefits have risen significantly since 2000, due in part to generous contracts negotiated with pilots, flight attendants and mechanics over the last few years. Five years ago, its per-employee compensation was about $64,000; this year, it is paying nearly $90,000 per worker. Ms. Wright said the compensation included profit-sharing payments and reflected raises given to pilots in 2002 after a five-year wage freeze.

 

Offsetting those numbers is the airline's heralded productivity. Since 2000, the number of passengers carried per employee has increased; Southwest employs only about 70 people per aircraft, compared with more than 100 per aircraft at traditional big airlines. Indeed, its employee ranks have dropped from a peak in 2003, even though Southwest has expanded service to major cities like Philadelphia and Pittsburgh. "They treat their people really well, and in return, they have really productive people," Mr. Strine said.

 

But it may need more. Northwest and Delta are seeking cuts in wages and benefits while they reorganize under bankruptcy protection. US Airways and United Airlines have already won cuts from their employees during their stints in Chapter 11. Now Continental and American, a unit of the AMR Corporation, are cutting their labor rates, without seeking bankruptcy court protection. That means Southwest must look at its labor costs, too, said Betsy Snyder, an airline industry analyst with Standard & Poor's Ratings Services. "It's not inconceivable at some point," she said, "that they could go to labor for some relief."

 

The first inkling of that could come next year, when Southwest's contract with its pilots will open for discussion.

 

Politics is another matter under discussion - with one loss and an even bigger fight yet undecided.

 

On Tuesday, Southwest was given a firm "no" in its efforts to jump from Seattle-Tacoma International Airport to Boeing Field, a move the airline painted as a bid to avoid an expected increase in the landing fees at Seattle-Tacoma.

 

But the bigger fight looms in the other Washington, before Congress, where Southwest is getting ready to fight its crosstown rival, American, over repeal of the Wright Amendment. Named for a former House Speaker, Jim Wright, the amendment limits direct flights from Love Field in Dallas to seven states. Passed in 1979, it was intended to encourage growth at fledgling Dallas-Fort Worth International Airport, American's home base.

 

But the amendment means that Southwest cannot operate flights from Dallas to other airports where it has a large market share, including Chicago Midway, Baltimore-Washington International, Las Vegas and Phoenix. Until Mr. Kelly became C.E.O. last year, Southwest merely put up with the situation, but with its growth at stake, the airline has decided to fight.

 

So far, the main beneficiary of the Wright Amendment, American Airlines, has fought back. Last week, American released a study saying that if the amendment were repealed, airlines would cut hundreds of flights at Dallas-Fort Worth, reducing service to cities in Texas, Arkansas, Oklahoma and Missouri. "A change of such magnitude can unleash unintended consequences that ripple throughout the transportation system," said Will Ris, American's senior vice president for government affairs.

 

Neither analysts nor Southwest executives say they think the issue is make-or-break for the airline. But Mr. Kelleher, who helped start up Southwest in San Antonio in 1972, said Love Field was the only airport where flights were restricted, even though the industry was deregulated in 1978.

 

"It seems clear that something should be done and very hopeful that it will be done and it would be very helpful to us if it can be done," Mr. Kelleher said, "but if it doesn't happen, life has to go on."

 

BUT it does not have to go on in Dallas. Southwest has no immediate plans to move, though Mr. Kelleher said that "inevitably, as we grow bigger across the rest of the country, and Dallas remains the same size, we might have to begin casting about for a place that's more efficient to operate."

 

Efficiency, after all, is the airline's watchword. And flexibility and determination have always been a vital part of its culture.

 

Kevin P. Mitchell, chairman of the Business Travel Coalition, which represents corporate travel departments and business travelers, said, "They always have a way of winning, even if they lose."

 

 

http://www.nytimes.com/2005/10/16/business...l?th&emc=th

[BA917]

So, um die Übersichtlichkeit zu bewahren, poste ich in dieses Thread 2 weitere Artikel der NYT.

Während CO wirklich ganz ordentlich da steht, bleiben die guten Zahlen bei AA leider aus. Nach kleinem Profit im 2.Quarter haben sie jetzt (im umsatzstärksten) einen satten Verlust eingefahren:

 

http://www.nytimes.com/2005/10/20/business/20air.html

 

AMR Posts a Loss; Profit at Continental

 

 

By REUTERS

Published: October 20, 2005

The AMR Corporation, the parent of American Airlines, posted a larger-than-expected third-quarter loss yesterday as high fuel prices outweighed fare increases. The company also said it expected a significant fourth-quarter loss if fuel prices remain where they are.

 

Another carrier, Continental Airlines, reported a better-than-expected quarterly profit, but its shares fell on concern of a cash squeeze late next year or early in 2007.

 

AMR reported a net loss of $153 million, or 93 cents a share, compared with a loss of $214 million, or $1.33 a share, a year earlier.

 

Stripping out one-time items, AMR's third-quarter loss was 58 cents a share, worse than analysts' average loss forecast of 51 cents.

 

High fuel prices added $204 million to costs in the third quarter compared with the second quarter for American, the nation's largest airline. Despite fare increases that helped push revenue up 15 percent, to $5.49 billion, ticket prices failed to keep up with fuel costs.

 

Continental reported a profit of $61 million, or 80 cents a share, for the third quarter, in contrast to a loss of $18 million, or 29 cents a share, in the quarter a year earlier. Revenue rose 15 percent, to $3 billion.

 

Continental fell 22 cents yesterday, to $11.67 a share. AMR rose 40 cents, to $12.40 a share.

[BA917]

http://www.nytimes.com/aponline/business/A...s-Airlines.html

 

Southwest, Alaska Airlines Perform Well

 

 

By THE ASSOCIATED PRESS

Published: October 20, 2005

Filed at 8:57 p.m. ET

 

DALLAS (AP) -- Southwest Airlines Co. and the parent of Alaska Airlines on Thursday, cashing in winning bets they made on the direction of fuel prices.

 

U.S. airlines are seeing strong demand for travel, and they've even had a bit of success in pushing up ticket prices, but high fuel prices have kept giants like American Airlines in the red.

 

Not so at Southwest and Alaska Air Group Inc., which were more aggressive than their rivals in taking options to buy fuel far in the future at set prices, a practice known as hedging.

 

Southwest said Thursday it earned $227 million, or 28 cents per share, in the third quarter, including an $87 million gain from its hedging. Analysts had expected 18 cents per share, according to a survey by Thomson Financial, and the results beat Southwest's year-ago profit of $119 million, or 15 cents per share.

 

Seattle-based Alaska Air Group, which operates Alaska Airlines and Horizon Airlines, used hedging to save on half the fuel it bought. Its profit rose to $90.2 million, or $2.71 per share. After special items, net income would have been $71.5 million, or $2.16 per share, still enough to beat Wall Street's forecast of $2.12 per share.

 

JetBlue Airways Corp. reported a profit of $2.7 million, or 2 cents per share, when analysts were forecasting a penny per share loss. But JetBlue was not as insulated from fuel prices as Southwest and Alaska, and it fell short of a year-ago profit of $8.1 million, or 7 cents per share.

 

New York-based JetBlue also said high fuel costs would push it to a loss for the fourth quarter and the year as a whole.

 

Shares of JetBlue dropped $1.49 or 7.6 percent, to close at $18.05 on the Nasdaq Stock Market. Shares of Southwest fell 51 cents or 3.3 percent, to $15.07, and Alaska shares dipped 16 cents, to $29.34 on the New York Stock Exchange.

 

Airlines have long taken steps to guard against spikes in fuel prices, usually buying options to acquire fuel at set prices. Southwest was more conservative than other carriers but stepped up its hedging against high fuel prices after prices spiked in 1999.

 

Other carriers were too weakened after the industry downturn in 2001 to make hedging deals, and now it's too late to get the kind of deals that Southwest and Alaska got, said Betsy Snyder, an airline credit analyst for Standard & Poor's.

 

Dallas-based Southwest, however, said it will pay the equivalent of $26 a barrel of oil -- less than half the current price -- for 85 percent of the fuel it will need in the fourth quarter.

 

Alaska locked in 50 percent of its fuel for this year at about $30 a barrel of oil. By contrast, JetBlue hedged against only about 20 percent of its fourth-quarter fuel at about $30 a barrel, and American Airlines only 8 percent at $48 a barrel, leaving them largely at the mercy of open market prices.

 

Hedging let Southwest cut its average cost of fuel to 95 cents per gallon in the third quarter -- far less than the other carriers who have released financial results for the July-September period. Alaska Airlines paid $1.56 a gallon, and JetBlue paid $1.70 -- and expects $2 a gallon the rest of the year. Continental Airlines Inc. paid $1.88 a gallon, and AMR Corp.'s American Airlines nearly $1.89.

 

Fuel was 19.6 percent of Southwest's operating expenses, compared to 23.7 percent at Continental, 27 percent at Alaska and Horizon, 29 percent at American and 31.4 percent at JetBlue, according to figures provided by the companies.

 

And Southwest is poised to continue reaping this advantage, with deals to buy more than half their fuel through 2007 at prices far below current levels.

 

Southwest Chief Executive Gary Kelly said the rising cost of fuel is the biggest risk facing airlines and hedging is a valuable insurance policy. Flying without such coverage, he said, ''is just unwise.''

 

There are limits to Southwest's maneuvering. The company warned that even with hedges, its price for fuel in the fourth quarter could jump to $1.25 a gallon or higher because of hurricane damage to refineries on the Gulf Coast.

 

''This year was as good as it gets,'' said Snyder, the S&P analyst.

 

All the carriers reported strong demand for travel, with planes flying more full than a year ago. Combined with recent price increases, that resulted in higher revenue.

 

JetBlue said revenue jumped 40 percent from a year earlier, to $453 million. Still, analyst Ray Neidl of Calyon Securities said high oil prices could force JetBlue to raise prices and drive away customers. He downgraded the stock.

 

Southwest's revenue rose 19 percent, to $1.99 billion, and Alaska said sales gained 10 percent, to $846 million.

 

Analysts said the revenue outlook could improve further if weaker airlines -- three large ones are now in bankruptcy -- cut flights and reduce the supply of seats, driving up prices.

 

Southwest announced Thursday it would begin service to Denver early next year, taking advantage of cutbacks there by UAL Corp.'s United Airlines, which is in bankruptcy protection, along with Delta Air Lines Inc. and Northwest Airlines Corp.

 

JetBlue increased its capacity 28.2 percent in the third quarter and, like Southwest, has more airplanes on order. Meanwhile, industry leader American expects to hold U.S. capacity flat next year.

[Gast]

Den New Yorkern scheint alles suspekt zu sein was aus Texas kommt.....

 

Niemand ist unsterblich, auch SWA nicht, aber die Probleme die in dem NYTimes Artikel angesprochen wurden hätten die legacy carrier gerne.

 

Selbst die NYTimes schreibt - obwohl die Überschrift etwas anderes sagt - das SWA hervorragend aufgestellt ist. Fuel hedging reicht immerhin noch bis 2010, man hat immer noch ca. ein Drittel weniger Personal pro Flugzeug, man hat immer noch eine hervorragend motivierte und hoch produktive Truppe und man kennt die Probleme die anstehen und hat 5 Jahre Zeit diese zu lösen. Da fliesst noch viel Wasser den Trinity River runter.

 

Eine moderate Erhöhung der Ticketpreise um 2-3 $$$ pro Passagier und Jahr wäre zum Beispiel durchsetzbar, vor 4 oder 5 Jahren war der lowest price noch bei $$$29,00, heute liegt der bei $$$39,00, die psychologische Grenze von 50 ist also noch lange nicht erreicht. Ein Quartal mit Verlust wäre für SWA natürlich ein Novum und man wird alles versuchen, das zu vermeiden und damit wohl auch Erfolg haben, allerdings - selbst wenn - eine Firma die 33 Jahre immer nur mir Gewinn abgeschlossen hat steckt so etwas mühelos weg. Da ist sehr viel Substanz in den balance sheets, selbst bei US accounting procedures

 

Nein, SWA wird auch weiterhin eine der am besten geführten Firmen in den USA bleiben. Mortality is not an option.

[FRA-T]

Das sehe ich genauso. Southwest wird von den Schwierigkeiten der Legacy Carrier enorm profitieren und in weitere Strongholds von denen einbrechen. Auch wenn sie nicht mehr alles Fuel hedgen können, stehen sie um Längen besser da als alle anderen US-Carrier.

An Southwest sollten sich einige europäische LCCs ein Beispiel nehmen, vor allem im Punkt Kunden- und Mitarbeiterzufriedenheit.