Southwest Airlines 1999 Annual Report Download - page 3

Download and view the complete annual report

Please find page 3 of the 1999 Southwest Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 54

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54

also has one of the best overall Customer Service records. LUV is our stock exchange
symbol, selected to represent our home at Dallas Love Field, as well as the theme of our
Employee and Customer relationships.
T O O U R S H A R E H O L D E R S :
In 1999, our magnificent People brought the Freedom to Fly to 57,500,000
Customers originating their journeys in every geographic region of the United States.
Leonardo da Vinci conceived powered flight; the Wright brothers invented powered flight;
but Southwest’s People have transformed the idea and the invention into an everyday
opportunity and reality for the people of the United States. The personal and business lives
of the American people have been extended and enriched by this Freedom, and
Southwest’s People appropriately take immeasurable pride in doing well for themselves by
doing great good for others. Our People are, every day and in every way, emotionally
engaged in a compelling cause and crusade: to bring the Freedom to Fly to ever more
American people. As evidenced by our 57,500,000 originating Customers in 1999, the
Freedom crusade of our People is succeeding, and may it ever be thus.
1999 was Southwest’s 27th consecutive year of profitability; job security; plentiful
Profitsharing; and adding value for our Customers and our Shareholders. It was also
Southwest’s eighth consecutive year of increased profits. Our 1999 earnings of $474.4
million (a 9.4 percent increase over 1998), however, would have been substantially greater
save for one depressant of seminal significance: the rapid escalation of jet fuel prices in
the second half of 1999, bringing them close to 1991 Desert Storm levels at the end of the
year and the beginning of 2000.
In fourth quarter 1999, on a year-over-year basis, Southwest’s unit revenues (per
available seat mile) increased by 1.6 percent and Southwest’s unit costs, excluding fuel,
decreased by 1.1 percent. The combination of improved unit revenues and improved unit
costs would be an ideal harbinger of improved profitability in 2000 were it not for the
uncertainty with respect to jet fuel prices over the course of the year.
Since Southwest can neither control nor predict definitively the level of 2000 jet fuel
prices, we have embarked upon a program to offset the potentially adverse effects of
greatly enhanced jet fuel costs by increasing unit operating revenues while simultaneously
decreasing nonfuel unit costs. If jet fuel costs continue at sharply elevated levels, earnings