Southwest Airlines 2005 Annual Report Download - page 11

eve ry i nt e ra ct i o n wi t h o u r C u st om e r s i s an op p o r tu n i t y to s ho wc as e ou r re li a b l e p ro d uc t wi t h warm ,
car i n g, co m p a ss i on a te C us to m e r S e r vi c e.
Although we fly planes, Southwest Airlines is really a Customer Service Company. And it is the way our
Employees deliver Customer Service that differentiates Southwest Airlines from every other airline. At Southwest,
we treat our Customers like guests, and our Employees are motivated to increase our productivity so that we
can enhance our product without adding to our cost structure. As part of the airline industry’s restructuring
and cost-cutting efforts, many airlines have chosen to cut free inflight amenities such as snacks, drinks, blankets,
and pillows. Southwest Airlines, however, remains committed to providing our Customers a comfortable inflight
experience. Southwest continues to give Customers free, name-brand snacks and nonalcoholic beverages on
every flight. Our cabins are also comfortable and clean and feature attractive leather seats. Although we are
low-cost, we invest in new planes and fly a young fleet with an average age of nine years.
Southwest Airlines has always been devoted to each and every community that we serve. Thousands of times
each year, Southwest Airlines and its Employees reach out to individuals, families, and entire communities,
providing help where it is needed. Since Hurricane Katrina, we have contributed millions of dollars in services
and cash to New Orleans Relief Funds and have partnered with numerous organizations to provide travel, raise
funds, and bring awareness to the needs of the New Orleans community. Southwest also generously supports
the Ronald McDonald House, and our Adopt-A-Pilot program operates systemwide and features the volunteer
efforts of more than 550 Southwest Airlines Pilots, who adopt and mentor a fifth-grade class with information
on aviation, geography, and science.
It is nearly impossible to list the many ways our Employees give to their communities. Whether it’s rallying a
group of Coworkers to help build a house or organizing a raffle to raise money for a community member in need,
the support is immeasurable. Our People serve from their hearts, and they truly try to make an ongoing, positive
difference in their “home towns.”
Strong Financial Position
Alt houg h t he l ast five years have bee n f inan cial ly d evasta ting for
the ai rlin e indu stry, ou r Empl oyees have persevered and
moved ah ead. Over the past 34-p lus ye ars , we have
wisely manag ed our growth . O ur Pe ople are visio nari es
and a re always pr uden tly pla nnin g for our
future. A s a resu lt of o ur di sci plin e and
financi al conse rvatism, we h ave streng then ed
our ba lance s heet d urin g the mo st
difficu lt perio d in avi atio n hi sto ry. We
have lo ts of liq uid ity and ample acce ss to
capital . We h ave improved our ca sh flow,
and So uthwest is the only U.S. ai rli ne
with an investme nt-g rad e c re dit rating .
We end ed 2 005 with $2. 5 bi lli on i n ca sh
and s hort te rm investmen ts, inc ludi ng
$950 m illi on in fuel h edge col lateral
deposit s. We al so have a fully ava ilab le
$600 mi llio n ba nk revolving cred it faci lity.
Our unm ortga ged asse ts have a valu e o f
nearly $7 bil lion , an d o ur deb t to tota l
capital is a pproxi matel y 35 p ercent,
including aircraft leases as debt. In addition,
we have prepaid more than $600 million
for future aircraft deliveries from Boeing.
Ou r p rofi ts substantia lly improve d i n
2005—ou r net in com e increased mo re
than 50 percent from 20 04! Considering
the enor mous operational challeng es we
SOUTHWEST AIRLINES CO. ANN UAL REPORT 2005
Southwest added yet another popular
Customer convenience in November 2005
when we introduced the southwestgiftcard,
available online at southwest.com.
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