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

GaryKelly
New Arrival

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.

13 Comments
Jwalsh3rd
Active Member

Thank you for the update.  It is a fantastic feat to have been profitable this last quarter given the challenges.  I want to let you know that in all of my encounters with people on your team, both at work and socially, it continues to impress upon me the impact a high quality, well-supported and trained team can have on business success.  I rarely meet SWA folks that do not love their job, even when facing challenges from weather, obnoxious customers, equipment problems or crowded airports and long lines of people wanting answers that are completely out of the employee's contro;.  Congratulations on having a great team!

 

I was little disapponited that you failed to mention the passing of Herb and what a rallying point his life was.  I observed a similar rally with your team as they remembered him.

 

 

yolgomez
New Arrival

I am very disappointed that our early vacation planned Non Stop flights to Cancun were changed yet we never got an email notifying us of the change our friends who were flying with us notified us they had gotten new emails with flights from SWA.  This just doesn't seem right.  You still show that Non Stop flight on 7/21/19 Sunday, yet our Non Stop 7/20/19 flight is no longer available?  Why SWA?  We booked in November obviously when prices were affordable.  Yes, you offered us a full refund, however now that summer is around the corner flights are double even triple on Delta Airlines this is to your advantage because you are no longer offering the get away rates.  You spiked up the flights even with Stops to 495 each way? Wow SWA is this what you call transparency? So disappointed with SWA right now.  Why aren't we being compensated for this HUGE inconvenience?  

Mlstites
New Arrival

I have been traveling SWA for 12 years, from PHX to LA/Burbank every week. For the last 3 weeks,the Tuesday morning flight into Burbank has been cancelled. The first time, with one hour notification. Rebooked, 2 hours later, I lost 6 patients that morning. 2nd time, 2 hour notification, I went to LAX, got a cab up to Burbank. Today, I got a 12 hour notice and rebooked tonight instead of the morning.

 

I have been with you guys for a long time. This time it has cost me money. Usually it cost me time, which the flights are off at night when coming home. I am down about $675.00. I run my own company, so it has been a hassle.

 

Maybe take the scheduled flight off your schedule if you know you do not have a plane.

djoshea
New Arrival

SWA wrotes:  "Boeing MAX aircraft, which  ...  [edited] we feel confident that all of the necessary actions have been taken to operate the aircraft safely and reliably.  Really?  After Boeing's CEO basically threw the 350 deaths due there unsafe flying disaster, phrased as "a link in a chain" of failure.  Hogwash.  This was 110% Boeing's fault.  This is simple.  The SECOND that the 737 MAX 8 becomes active in the Southwest fleet, is the same moment I become an EX Southwest customer.  Really, your phrasing above already frankly makes me an ex-Southwest customer.  "Necessary actions ... to operate the aircraft safely and reliably."  First, if you think you know what those are now, I don't want to fly with you.  Second, there are no such actions that make this plane safe.  You own 34 paper weights, and the second you start throughing them into the air again, I fly with Delta and Alaska. 

djoshea
New Arrival

Contrary to the positioning from Southwest, the more that comes out about the 737 MAX, the worse it gets.  MCAS, pilot training, designed-to-achieve-type-cert, essentially self-certification by Boeing, firing of Boeing certification employees that emphasized too much safety, and not enough Boeing profits, lobbying the FAA to overlook modern safety standards that the 737 MAX8 does not achieve (for instance redundant rudder control-lacking), decent testing of flight critical systems like MCAS that override pilot input.  Differences in the way 737MAX8 fly and react to pilot input vs. 737NG (like stick pull back disengaging electric trim on NG's, but not doing so on MAX8 (because it needs to override the pilot to handle the dynamic instability in the lift pattern of the plane.)  The FAA's failure to ground the plane after the 1st crash (because of Boeing lobbying).  The KNOWLEDGE of what was wrong by Nov. 2018, but STILL no grounding.  A second crash, and STILL lobbying to keep these planes in the air.

 

These are planes that should never fly again given what is now publically known about the plane.  AND YET, Southwest keep droulig out sounds like, "when the "fix" is applied we will be ready to go". 

 

Mr. Kelly, clearly you DO NOT GIVE SH...T about the safety of your customers.  It is DISGUSTING.  You and your decision making process is ENTIRELY about the profits EXPLICITLY AT THE EXPENSE OF CUSTOMER safety.   You say you would gladly ground the 737MAX8 indefinitly if that was the right call on customer safety?  Put your money where your mouth is.   How much more has to come to light before your UNFOUNDED faith in this aircraft, and Boeing your supplier actually gets the proper doubt any decent human being would apply.  

 

You truly disgust me.

MauiCalGirl
New Arrival

I am a frequent commuter from Maui to California and was very happy to see SWA start flying to Maui. I Also book flights for many other people. Maui Travelers have a serious interest in SWA success to keep a healthy competition going with Hawaiian Airlines  and Alaska. Also very very happy to see inter island competition finally! Please consider assigned seating on these flights knowing that most of these travelers are on vacation with family and will chose another airline in order to guarantee sitting together and be where they prefer to be on the plane. This is a unique class of travel, not like business travel at all.

In addition and most importantly, we need a guarantee that we will not be on the Max 800 when they are no longer grounded. I have a booking for 5 children and an adult to return to California in late August and my booking states that the airplane assignment can change. I don’t know anyone who trusts “software” to fix a problem on a plane especially when it appears to be a software fix for a design problem of the engine being in the wrong place in the plane causing it to potentially stall from what I’ve read, written by technical knowledgeable people. If I cannot get a guarantee that the plane type will be the 737-800 I should be able to get a full refund in order to book these 6 passengers on another airline while seats are still available.

jm811
New Arrival

Six out of my past 7 SWA flights have been cancelled or significantly delayed.  My direct flight from BWI to San Diego for this morning (a trip I make frequently) was cancelled yesterday due to mechanical issues.  I had to rebook, lose my EarlyBird position and travel on a later flight with a connection through Houston today.  The connecting flight this afternoon was ~ 30 minutes late leaving Houston.  I had planned to land in San Diego at 11:20  this morning and reach my office just after noon.  Instead I am still sitting on an airplane at 5:27 with another hour and 15 minutes or so to go.  The entire afternoon work schedule wasted. 

 

Most of my flight reschedulings have been due to maintenance issues.  What is going on SWA?  This is costing me significantly in lost work time, missed meetings, and wasted business opportunities.  I understand from a conversation with Customer Care yesterday afternoon that SWA is still booking flights on the Max8 even though there is no time table for the return of this airplane.  Does not seem like a wise plan.  

 

It rings a bit hollow to read this sort of post and the letter in the beginning of the SWA magazine.  Just doesn't ring true anymore.  I am incredibly disappointed and since I rely on dependable flights to get me to my business destinations across the US, I am in the market for a new airline.  

 

Janice 

 

Westerner73
New Arrival

The 737 MAX is a "Frankenplane" not a trusty 737.  Its airframe is inherently not airworthy and needs software to keep the plane in the air.  Plus, what else did Boeing hide in the rush to bring the MAX to market?  I'm never going to fly a 737 MAX and I hope Southwest will scrap the plane and demand Boeing build a modern new aircraft with a sound airframe.

InvestorCharlie
New Arrival

I am an aviation fanatic without a doubt. And I fly on average 24 round trip flights a year with a majority of those being on southwest airlines. I have flown on the 737Max jets on a few occasions. I have had flights without a single bump and I have had flights with non stop rocking and bouncing around. For many years Boeing had a  seemingly insurmountable over Airbus. Boeing took its foot of the gas and look at where we are today. The 787 had several delays and still encounters problems. The 737 Max jets have experienced to fatal crashes. In the meantime, Airbus A350 is a far superior aircraft with what appears to be no issues and at a lower price than its 787 competition. So Boeing rushed a product out, because they feared falling behind in another segment of the market as Airbus rolled out a new better workhorse A320NEO. 

 

Honestly, the 737Max planes with new software could end up making it the safest plane in the sky both on paper and in reality. As comfortable as a frequent flyer that I am, I am opting to fly on other aircraft other than Boeing products. 

 

I encourage you as one of Boeings largest and longest running clients end the 737 Max line in favor of a new aircraft that is done properly and with pure and unwavering support from a stern FAA. This obviously would not sit well with your investors or with Boeings investors. Put the safety of passengers before the wealth of your shareholders. 

 

Feel free to reach out would, I would welcome a deeper discussion. 

 

Note my decline in usage of southwest airframes is a vote against the use of the 737Max. 

djoshea
New Arrival

Wow, the messaging from Boeing has just become unbelievably embarrassing for them.  Blaming the LionAir and EthiopianAir pilots, for this obvious Boeing failure, it makes me ashamed the company is USA based.   But now, Southwest's CEO mouths off every chance he gets about how he can't wait to get onto a 737MAX8 as soon as they are returned to air service.  Southwest's CEO has lost all perspective: profits over safety, that is clear enough now.  For Boeing, that unfortunately was evident last November, and has just become worse and worst and worse.  But Mr. Kelly, you seem to be desperate to catch up with Boeing in trying to gloss over the problems with this airplane, and its lack of airworthyness.   In case I had any second thoughts on where to fly, you have made those decisions easy, all by yourself.  It will no longer be on Southwest airlines.

Lisachandler
New Arrival

FLT 1133, BNA TO.PHX.. CHECKED BAG FULL OF TOYS AND CLOTHING FOR 1ST, NEW, GRANDDAUGHTER. UPON CHECK IN I WAS TOLD MY BAG WAS 4 LBS OVER WEIGHT. HUSBAND AND I BOTH REPETELY ASKED HER TO REMOVE HER HAD FROM BAG. (BECAUSE OF WEIGHT ISSUE. SHE DID NOT.) HAD TO PAY $75 FOR EXTRA 4 LBS. !!!!!!!! WAS AFFRAID TO RAISE AN ISSUE BECAUSE, I WAS BOILING MAD AND I DIDNT WANT TO BE REMOVED BY TSA. AFTER GETTING THROUGH SECURITY, AND SPEAKING TO A FEW PASSENGERS AND A SW ATTENDANT. I COULD HAVE TAKEN THE EXTRA WEIGHT AND BUT IT ON MY CARRY ON. WAS NEVER OFFERED OR SUGGESTED. WHATS 4 LBS. NOTHING. COULD HAVE EASILY DONE THIS. I HAVE NEVER COME ACROSS A AGENT FOR SW, SO RUDE, HURRIED, IGNORING, DID NOT CARE. THE FLIGHT TIME CHANGED 3 X IN A 24 HOUR PERIOD. I UNDERSTAND THE 727-800 SADDENING ISSUE. BUT IS THIS THE WAY YOU RECOVER LOSSES. THE INSIDE OF THE PLANE WAS FILTHY. I HAVE PICTURES. I HAVE NEVER EVER HAD SUCH A DISGUSTING EXPERIENCE WITH SW EVER. And no, I did not know of the weight limit. On flight now. Spent 1hr and 15 minutes looking for it. Receipt for 19.50 (est) per pound says nothing and doesnt even have weight of bag. Is this the way you are recovering your $.70 a share from. I have understood a huge gross overweight. But 4 pounds, I could have put in my personal carry on bag. And the fact this solution nor ANY SOLUTION was NOT offered. IM SICK!

Your_Majesty
New Arrival

I have been a SW customer exclusively for many years; however, I recently tried to book my usual direct flight from ATL to DTW or GRR airports only to see no direct flights listed.  I called the company for assistance and was told that all direct flights to Michigan have been cancelled.  The phone attendant was apologetic, but otherwise unhelpful and didn't eve offer to forward my concerns.

 

This is ridiculous.  Flights with stopovers take five hours or more, where a direct flight takes two hours tops.  The direct flights were very popular and were always fully booked.  This was a profitable route for SW.

 

I am elderly and cannot do long flights with frequent changes.  If SW is not willing to maintain a direct flight to Michigan, I am going to have to fly another airline.  This time it is Delta (which I hate), but I have no other choice.  I would like to hear a response from SW, but certainly won't hold my breath.  Unless you start refocusing on customer retention, I predict an fast bankrupcy for SW in the very near future.

NicoleAshley Employee
Employee

We're sincerely sorry for letting you down with the changes to our flight schedule. Since we don’t have an unlimited number of aircraft and Employees, we have to make the most out of what we have and create a flight schedule that maximizes our resources, ensures cost savings (and low fares), and offers the best overall product to our Customers. I know that an explanation does not solve the problem of getting you from point A to point B, and I’m truly sorry to know that we might lose your patronage for even one trip as a result of our schedule changes.  My hope is that, when we service a route that fits your travel needs, you’ll continue to choose Southwest as your patronage means the world to us.