Southwest Airlines 1995 Annual Report Download - page 18

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18
Looking ahead.
As we enter our 25th Anniversary of operations in 1996, we believe we are
positioned strategically stronger than ever to meet the many challenges we will
undoubtedly face over the next 25 years. Competitive pressures have somewhat
stabilized as the industry consolidates hubs and limits capacity growth. We have
significantly enhanced our distribution capabilities, thereby reducing our
dependence on our competitors’ computer reservations systems. Although we
have been adversely impacted by the recent airline industry fuel tax, we remain
the low cost producer in the industry and will continue our ongoing, intense
efforts to maintain our position as THE Low Cost Airline.
We are well positioned to take advantage of shorthaul, point-to-point
opportunities as our competitors consolidate their operations and will continue
our strategy of controlled growth, operating cost control, and outstanding
Customer Service.
We have been profitable for 23 consecutive years. We have the lowest
operating costs in the industry and the best net profit margin among the major
carriers. Our balance sheet remains strong and our “A” credit rating on our
unsecured debt assures adequate access to the capital market to meet our
expansion needs cost-effectively.
With our recent entry into the Florida market, we diversify our robust route
system even further, serving 48 cities in 23 states by April 1996. Eleven of our
1996 aircraft deliveries, or approximately four percent of our ASM capacity, will
be dedicated to our start-up of service in Tampa, Ft. Lauderdale, and Orlando.
At the end of 1995, 14 percent of our ASMs were deployed intra-California; ten
percent in the northwest region of our system; 36 percent in the remaining part
of the western region (west of Texas); 21 percent in the heartland region (Texas,
Oklahoma, Arkansas, and Louisiana); 16 percent in the midwest region; and
three percent in the eastern region (Baltimore).
We are THE Low Fare Airline and, in our opinion, the airline of choice for the
shorthaul passenger. We consistently have the dominant market share in our