Southwest Airlines 1998 Annual Report Download - page 4

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4
SOUTHWEST AIRLINES CO. ¤ SIX STORIES OF FREEDOM
To our Shareholders:
1998 was Southwest Airlines’ 26th consecutive year of profitability. It was also
Southwest Airlines’ 26th consecutive year of job security and bounteous Profitsharing
for our well-loved and loving People. Our philosophy of achieving low costs and low
fares (through high productivity) and maintaining high spirits (through affection and
respect for each other) has proved rewarding for our Employees, our Shareholders,
and our Customers, for whom Southwest remains, truly, “A Symbol Of Freedom.”
Our 1998 earnings of $433.4 million (diluted net income per share of $1.23) exceeded
the $317.8 million of 1997 (diluted net income per share of $.93) by 36.4 percent. At
this early juncture in 1999, our load factor, Customer bookings, and unit revenue trends
are relatively strong. As a consequence, our preliminary assessment of first quarter
1999 earnings prospects is quite optimistic, barring any serious and precipitous
downturn in the U.S. economy or other, uncontrollable adverse occurrences.
We anticipate delivery of 32 New Generation Boeing 737-700s during 1999 and the
retirement of six older generation 737-200s. Our 1999 net increment in available seat
mile capacity is presently expected to be in the 11 to 12 percent range, although, at this
writing, we are also actively pursuing the acquisition of several used 737-300s.
Manchester, New Hampshire, is our newest city and a very proud, productive, and
profitable addition to our route system. We thank the people of Providence, of
Manchester, and of all New England for their enthusiastic reception and very strong
continuing support of Southwest Airlines service.
On March 14, 1999, we will commence serving MacArthur Airport in Islip, Long Island.
Thanks to the foresight and vision of the members of the Islip Town Council and
Supervisor Pete McGowan, the MacArthur Airport facilities have been expanded and
remodeled to accommodate Southwest’s introduction of service to the State of New
York. We will begin that service with eight nonstop trips to Baltimore/Washington; two
to Chicago (Midway); one to Nashville; one to Tampa Bay; and through and