Southwest Airlines 2002 Annual Report Download - page 38

Download and view the complete annual report

Please find page 38 of the 2002 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 85

  • 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
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85

SOUTHWEST AIRLINES CO. 2002 10-K | 19
14 aircraft during 2001 (all prior to September 11)
and its revenue effects were partially offset by a
decrease of 1.9 percent in passenger yield.
Passenger yield decreased as a result of fare
discounting by the Company and the airline
industry in general as the United States economy
weakened throughout 2001. The Company’s load
factor (RPMs divided by ASMs) over this time
period was 71.2 percent, compared to 71.7 per-
cent for the same period in 2000.
From September through December 2001,
passenger revenues were $404.2 million, or
21.7 percent, lower than the same period of
2000. Capacity increased 4.0 percent and the
Company’s load factor fell to 62.0 percent,
compared to 68.2 percent during the same
period of 2000. Passenger yields were 17.2 per-
cent lower during this period, versus the same
period in 2000, due to aggressive fare sales
following the terrorist attacks.
For the full year 2001, the Company experi-
enced a 1.2 percent increase in revenue
passengers carried, a 5.4 percent increase in
revenue passenger miles (RPMs), and a
9.0 percent increase in ASMs. The Company’s
load factor for 2001 was off 2.4 points, to
68.1 percent, and there was a 6.6 percent
decrease in 2001 passenger yield.
As a result of weak economic conditions
throughout 2001, consolidated freight revenues
decreased $19.5 million, or 17.6 percent. There
were decreases in both the number of freight
shipments and revenue per shipment. Other rev-
enues increased $14.3 million, or 20.3 percent,
primarily due to an increase in commissions
earned from programs the Company sponsors
with certain business partners, such as the
Company-sponsored First USA Visa card.
Operating Expenses. Consolidated operating
expenses for 2001 increased $295.6 million, or
6.4 percent, compared to the 9.0 percent
increase in capacity. Operating expenses per
ASM decreased 2.5 percent to $.0754, compared
to $.0773 in 2000, primarily due to a decrease in
average jet fuel prices. The average fuel cost per
gallon in 2001 was $.7086, 10.0 percent lower
than the average cost per gallon in 2000 of
$.7869. Excluding fuel expense, operating
expenses per ASM decreased .3 percent.
Operating Expenses per ASM for 2001 and 2000 were as follows:
2001 2000
Increase
(decrease)
Percent
change
Salaries, wages, and benefits 2.84¢ 2.81¢ .03¢)1.1%
Fuel and oil 1.18 1.34 (.16) (11.9)
Maintenance materials and repairs .61 .63 (.02) (3.2)
Agency commissions .16 .27 (.11) (40.7)
Aircraft rentals .29 .33 (.04) (12.1)
Landing fees and other rentals .48 .44 .04)9.1)
Depreciation .49 .47 .02)4.3)
Other 1.49 1.44 .05 3.5
Total 7.54¢ 7.73¢ (.19)¢ (2.5)%