Southwest Airlines 1997 Annual Report Download - page 4

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4
SOUTHWEST AIRLINES CO. ♥ FIVE SYMBOLS OF FREEDOM
TO OUR SHAREHOLDERS: 1997 WAS SOUTHWEST
AIRLINES’ 25TH CONSECUTIVE YEAR OF
PROFITABILITY IN AN INDUSTRY LONG NOTED FOR
ITS VULNERABILITY TO ECONOMIC CYCLES. OUR
PEOPLE’S ABILITY TO PRODUCE PROFITS IN BAD,
AS WELL AS GOOD, ECONOMIC TIMES HAS
REWARDED THEM WITH JOB SECURITY AND
INCREASING PROSPERITY.
It has also produced bountiful returns for our Shareholders, including, of
course, our Employee-Shareholders. Put very simply, on behalf of our
Employees and our Shareholders, our goal for the next 25 years is to
replicate our successes of the last 25 years.
Our 1997 earnings of $317.8 million (diluted net income per share of
$1.40) surpassed the $207.3 million of 1996 (diluted net income per share
of $.92) by 53.3 percent, as our operating revenues increased 12.1
percent while every category of operating expenses, except salaries,
wages, and benefits (up 13.7 percent), increased by a lesser percentage,
resulting in an aggregate operating expense growth of 7.8 percent on a
9.2 percent expansion of available seat mile capacity.
Our first Boeing 737-700s were placed in commercial service in January
1998, and we anticipate receiving 22 of these greatly advanced and most
economical and efficient new model aircraft in 1998. Because of our
confidence in the 737-700 and its importance to the future competitive
success of Southwest Airlines, in December 1997 we exercised options,
and placed purchase orders, for 59 additional aircraft, raising our total
firm orders to 129 and providing ample coverage, through options, of our
potential fleet needs through 2006.