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First Quarter Recap and MAX Update: A Message from Southwest’s CEO Gary Kelly

GaryKelly Employee
Employee

We announced our first quarter results yesterday, and I wanted to provide you with an update on our performance, as well as share with you the status of the Boeing 737 MAX aircraft. 

 

First and foremost, I’d like to start by commending our Employees on their resiliency and perseverance in what was a challenging first quarter on several fronts, including a partial government shutdown, extreme weather throughout the country on an almost weekly basis, and the grounding of the Boeing MAX aircraft following the tragic accident of Ethiopian Airlines Flight #302. I also want to thank our Customers for their patience as we’ve worked through revising our schedule.   

 

Despite these challenges, I’m incredibly proud to report that we did indeed prevail, and we produced net income of $387 million, or $.70 a share—just below the year ago amount. That is an incredible result, especially considering the near-record level of cancellations we had to deal with.

 

Switching gears, I know many of you have been following the developments

surrounding the Boeing 737 MAX aircraft. On March13, the Federal Aviation Administration (FAA) issued an order to ground all Boeing MAX aircraft operated by U.S. airlines—a decision we supported and complied with immediately. Southwest owns 34 Boeing MAX aircraft, which will remain out of service until the FAA rescinds this order, and we feel confident that all of the necessary actions have been taken to operate the aircraft safely and reliably.    

 

Safety is our top priority. It always has been, and it always will be. Our commitment to the Safety of our Employees and our Customers is uncompromising. As I have said before, if I am not 100 percent confident we can deliver on our commitment to Safety, I would not hesitate to ground our entire fleet—or any segment of it. That would not be a hard decision for me to make.

 

We are equally committed to offering our Customers and Employees a reliable schedule and operating the best airline we possibly can. With that in mind, we have been revising our schedule to reduce last-minute flight changes and unexpected disruptions to our Customers’ travel plans. Earlier this month, we modified our schedule through August 5, 2019, to add further stability for Customers traveling during this busy summer season. 

We simply don’t have a confirmed timeline to share with regard to when the MAX will return to service. There have been dates ranging from May to July depending on who is commenting. We have our schedule adjusted through August 5, and if the aircraft are available to fly earlier, we will use them as additional spares to further enhance the Reliability of our scheduled service. 

 

We remain in constant contact with the FAA, Boeing, and industry regulators, as well as our Employee Unions and industry peers, to prepare for implementation of software updates and additional training that Boeing and the FAA will provide to all operators worldwide. These enhancements will further advance the safe operation of the Boeing MAX 8 aircraft and add yet another layer of Safety, and I am incredibly encouraged by the path forward. I have the utmost confidence in our People, procedures, airplanes, training, maintenance, and performance monitoring systems, enhanced by our data-focused Safety Management System.

 

The Boeing 737 is the most successful commercial airplane in aviation history. Our Pilots are the best 737 Pilots in the world. No one knows more and no one is better trained. Southwest has one of the best Safety records in our industry throughout nearly five decades, which is a source of pride for me and all of our entire Southwest Family.

 

Our commitment to Safety is unwavering, and we will never rest in our pursuit to make a safe airline even safer. Once again, thank you for your patience and understanding, and we hope to see you onboard very soon.