Southwest Airlines 2004 Annual Report Download - page 22

prevention of leaks from underground aircraft fueling Southwest's point-to-point route system, as com-
systems could increase operating costs in the airline pared to hub-and-spoke, provides for more direct non-
industry. The Company does not believe, however, that stop routings for Customers and, therefore, minimizes
such environmental regulatory developments will have a connections, delays, and total trip time. Southwest
material impact on the Company's capital expenditures focuses on nonstop, not connecting, traÇc. As a result,
or otherwise adversely eÅect its operations, operating approximately 78 percent of the Company's Customers
costs, or competitive position. Additionally, in conjunc- Öy nonstop. In addition, Southwest serves many conve-
tion with airport authorities, other airlines, and state niently located secondary or downtown airports such as
and local environmental regulatory agencies, the Com- Dallas Love Field, Houston Hobby, Chicago Midway,
pany is undertaking voluntary investigation or remedia- Baltimore-Washington International, Burbank,
tion of soil or groundwater contamination at several Manchester, Oakland, San Jose, Providence,
airport sites. The Company does not believe that any Ft. Lauderdale/Hollywood, and Long Island Islip air-
environmental liability associated with such sites will ports, which are typically less congested than other
have a material adverse eÅect on the Company's opera- airlines' hub airports and enhance the Company's ability
tions, costs, or proÑtability. to sustain high Employee productivity and reliable on-
time performance. This operating strategy also permits
Customer Service Commitment. From time to the Company to achieve high asset utilization. Aircraft
time, the airline transportation industry has been faced are scheduled to minimize the amount of time the
with possible legislation dealing with certain Customer aircraft are at the gate, currently approximately 25 min-
service practices. As a compromise with Congress, the utes, thereby reducing the number of aircraft and gate
industry, working with the Air Transport Association, facilities than would otherwise be required. The Com-
has responded by adopting and Ñling with the DOT pany operates only one aircraft type, the Boeing 737,
written plans disclosing how it would commit to im- which simpliÑes scheduling, maintenance, Öight opera-
proving performance. Southwest Airlines formalized its tions, and training activities.
dedication to Customer Satisfaction by adopting its
Customer Service Commitment, a comprehensive plan In Ñrst quarter 2005, Southwest began its Ñrst
which embodies the Mission Statement of Southwest codeshare arrangement, with ATA Airlines. Under this
Airlines: dedication to the highest quality of Customer codeshare arrangement, Southwest and ATA will ex-
Service delivered with a sense of warmth, friendliness, change Customers at Chicago Midway Airport, initially,
individual pride, and Company Spirit. The Customer with a limited number of other connect points to be
Service Commitment can be reviewed by clicking on subsequently added as our respective ground facilities
""About SWA'' at www.southwest.com. The DOT and permit. Under this codeshare arrangement, Southwest
Congress are expected to monitor the eÅects of the may market and sell tickets for certain Öights on ATA
industry's plans, and there can be no assurance that that are identiÑed by Southwest's designator code, e.g.,
legislation or regulations will not be proposed in the WN Flight 123. Conversely, ATA may market and sell
future to regulate airline Customer service practices. tickets under its code designator (TZ) for certain
Öights on Southwest Airlines. All codeshare itineraries
Marketing and Competition marketed by either airline will involve connecting ser-
vice between a Southwest Öight and a Öight operated by
Southwest focuses principally on point-to-point, ATA. Any Öight bearing a Southwest code designator
rather than hub-and-spoke, service in markets with that is operated by ATA will be disclosed in Southwest's
frequent, conveniently timed Öights and low fares. At reservations systems and on the Customer's Öight itiner-
year-end, Southwest served 359 nonstop city pairs. ary, boarding pass, and ticket, if a paper ticket is issued.
Southwest's average aircraft trip stage length in 2004 Other than the ATA agreement, Southwest does not
was 576 miles with an average duration of approxi- interline or oÅer joint fares with other airlines, nor does
mately 1.5 hours. Examples of markets oÅering frequent Southwest have any commuter feeder relationships.
daily Öights are: Dallas to Houston Hobby, 29 weekday
roundtrips; Phoenix to Las Vegas, 19 weekday round- Southwest employs a relatively simple fare struc-
trips; and Los Angeles International to Oakland, ture, featuring low, unrestricted, unlimited, everyday
22 weekday roundtrips. Southwest complements these coach fares, as well as even lower fares available on a
high-frequency shorthaul routes with longhaul nonstop restricted basis. The Company's highest non-codeshare,
service between markets such as Baltimore and Los oneway unrestricted walkup fare oÅered is $299 for any
Angeles, Phoenix and Tampa Bay, Las Vegas and Öight. Even lower walkup fares are available on South-
Nashville, and Houston and Oakland. west's short and medium haul Öights.
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