Southwest Airlines 2005 Annual Report Download - page 4

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Gary C. Kelly
Chief Executive Officer
Colleen C. Barrett
President
Herbert D. Kelleher
Chairman of the Board
investigation of this accident. We also continue to work
closely with the Federal Aviation Administration to ensure a
safe airline is as safe as it can humanly be.
Our compassion is extended to all those affected by last
years’ natural disasters but particularly those in New Orleans.
Rebuilding our service in New Orleans remains number one
among competing priorities. We recently announced ve
more daily departures effective March 17 and coincident with
the delivery of new Boeing 737 aircraft.
For 2006, we presently plan to add 33 new Boeing 737s
to our eet of 445 aircraft (as of December 31, 2005). That
will produce an estimated increase in ASMs of eight percent.
We are excited about the growth opportunities presently
anticipated for 2006 and, especially, the strong revenue
trends we are currently experiencing. Jet fuel prices,
however, loom large over the 2006 outlook. Even with an
industry-leading fuel hedge in place for 2006 (approximately
73 percent at approximately $36 per barrel), higher prices
could cost us as much as $600 million in additional fuel
expense based on current market prices. We will need
strong revenue growth and energetic cost controls in other
areas to overcome that hurdle.
The splendid results for 2005 were achieved, plainly and
simply, through the efforts of our gifted and caring
Employees. They are the reason that FORTUNE magazine,
for the ninth year in a row, named Southwest Airlines one of
America’s Most Admired Companies. And it is because
of them and their Warrior Spirits, Servants’ Hearts, and
Fun-LUVing Attitude that we are optimistic Southwest
Airlines will rise up to meet these heady challenges.
To all the magnicent People of Southwest Airlines, we
say, again, a hearty “Thank You!”
January 16, 2006
Most sincerely,
SOUTHWEST AIRLINES CO. ANN UAL REPORT 2005 3