Southwest Airlines 2006 Annual Report Download - page 4

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S O U T H W E S T A I RL I N E S C O . A N N U A L R E P O R T 2 0 0 6
achieved unit cost reductions, this was an exceptional performance.
It was even more impressive considering we carried record
numbers of Customers and record numbers of checked bags.
This was all accomplished with pay increases and not pay cuts,
furloughs, or layoffs.
Last year was exciting in terms of our route network expansion.
We started 2006 in grand style by reinaugurating service to Denver
on January 3. Starting with 13 daily departures, Denver has been one
of our fastest new city startups ever, now at 33 daily departures.
In October, we initiated service to Washington Dulles Airport
in Northern Virginia, located in one of the United States’ fastest
growing regions. We are off to a great start and very excited about
our growth potential from that airport and region.
And last, but certainly not least, there is the Reform of the Wright
Amendment, which finally starts to free Dallas Love Field after
27 years of federal restraint. Under the Reform law, we were allowed
to immediately begin offering through and connecting service beyond
the nine Wright Amendment states, generating an incremental
$11 million in revenue in fourth quarter 2006 alone. In 2014, the
law permits us to offer nonstop service from Dallas Love Field to any
domestic destination. Almost two years to the day from when we
started our legislative efforts, Love Field is liberated. Hallelujah!
In 2007, we presently plan to add 37 new Boeing 737s to our
fleet of 481 aircraft (as of December 31, 2006). That will produce
an estimated eight percent increase in Available Seat Miles. We
are very excited about our growth prospects for 2007. Currently,
there is much speculation about airline industry consolidation. While
we have no plans to merge with or acquire any other carrier, we
are poised and well-positioned to consider any asset sales or route
reductions that might ensue from consolidation.
The spectacular improvements realized in 2006 were achieved
solely by the efforts and resolve of our Employees. The results belie
the significant challenges that they faced and overcame. They are the
reason that FORTUNE magazine, for the tenth year in a row, named
Southwest Airlines one of America’s Most Admired Companies.
They are the reason we are optimistic and confident about the future
of Southwest Airlines. They are, simply, the best.
January 17, 2007
Gary C. Kelly
Chief Executive Officer
Colleen C. Barrett
President
Herbert D. Kelleher
Chairman of the Board
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