Southwest Airlines 1994 Annual Report Download - page 6

To Our Shareholders
Southwest Airlines – 1994 Annual Report Page 6
To Our Shareholders
In 1994, Southwest Airlines produced a profit of $179.3 million, a 16.2 percent increase over the $154.3
million of 1993, excluding the cumulative effect of 1993 accounting changes. Our net profit margin was
6.9 percent in a year when the domestic passenger carrier industry, as a whole, basically broke even.
In 1994, we also:
1. Completed negotiation of the launch contract for the Boeing 737-700 and the definition of our
new aircraft to be received by Southwest beginning in fourth quarter 1997;
2. Completed negotiation of a contract for installation of Heads Up Displays (HUD) in the cockpits
of our 737-300s, -500s, and -700s, providing greater landing and takeoff capabilities in adverse
weather conditions, such as fog;
3. Acquired Morris Air and smoothly, successfully, and profitably integrated Morris into Southwest
within nine months;
4. Including Morris, added seven new cities and introduced 30 percent more capacity to the
Southwest system;
5. Designed, developed, tested, and prepared to go nationwide on January 31, 1995 with
“Ticketless” air travel;
6. On an interim basis, after our ouster from Apollo and System One, introduced our own
Southwest “ CRS” (SWAT) for very high volume travel agencies and overnight ticket delivery for
high volume travel agencies;
7. Introduced three-day Ticket By Mail for direct consumers;
8. Defined the functionality and negotiated a contract with American Airlines for entry into Basic
SABRE, which, on May 1, 1995, will afford automated access to our Reservations System for 60
percent of our travel agency sales, and, we are convinced, produce lesser overall distribution costs
for Southwest; while also providing our first direct, computerized access to the consumer through
Easy SABRE and Commercial SABRE;
9. Negotiated a contract with the State of Arkansas and City of Little Rock and designed and built
our 900-Agent Little Rock Reservations Center;
10. Negotiated and signed a collective bargaining agreement with the IAM covering 5,000
Reservation Sales and Customer Service Agents;
11. Negotiated a landmark Pilot contract with the Southwest Airlines Pilots’ Association (SWAPA),
fundamentally offering stock options in lieu of pay increases;
12. Sustained a year-long collision with Continental Lite, indirectly in Texas and directly on the
Midway Airport-Cleveland-Baltimore axis of our system;
13. Met the United Shuttle assault head-on in California on October 1, 1994;
14. Won our third annual Triple Crown for best baggage handling; best ontime performance; and
fewest Customer complaints per Customer carried;
15. Placed first in the Airline Quality Rating statistics; and
16. Operated 624,476 flights, carrying 42,742,602 Customers in perfect safety.