Southwest Airlines 2008 Annual Report Download - page 33

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Southwest were unable to acquire additional aircraft
from Boeing, or Boeing were unable or unwilling to
provide adequate support for its products,
Southwest’s operations could be adversely impacted.
In addition, Southwest’s dependence on a single
aircraft type could result in downtime for part or all
of its fleet if mechanical or regulatory issues relating
to the Boeing 737 aircraft type were to arise.
However, given the Company’s years of experience
with the Boeing 737 aircraft type and its longterm
relationship with Boeing, the Company believes the
advantages of operating a single fleet type outweigh
the risks of its single aircraft strategy.
As discussed above under “Item 1. Business-
Insurance,” Southwest carries insurance of types
customary in the airline industry and is also provided
supplemental, first-party, war-risk insurance
coverage by the federal government at substantially
lower premiums than prevailing commercial rates. If
the supplemental coverage is not extended,
Southwest could incur substantially higher insurance
costs. In addition, in the event of an accident
involving Southwest aircraft, Southwest could be
responsible for costs in excess of its related insurance
coverage, which costs could be substantial. Any
aircraft accident, even if fully insured, could also
have a material adverse effect on the public’s
perception of Southwest.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Aircraft
Southwest operated a total of 537 Boeing 737
aircraft as of December 31, 2008, of which 82 and 9
were under operating and capital leases, respectively.
The remaining 446 aircraft were owned.
The following table details information on the 537 aircraft in the Company’s fleet as of December 31, 2008:
737 Type Seats
Average Age
(Yrs)
Number of
Aircraft
Number
Owned
Number
Leased
-300 ................................. 137 17.4 185 112 73
-500 ................................. 122 17.7 25 16 9
-700 ................................. 137 5.3 327 318 9
Totals ............................... 10.1 537 446 91
In total, at January 22, 2009, the Company had firm orders, options and purchase rights for the purchase of
Boeing 737 aircraft as follows:
Firm Orders, Options and Purchase Rights for Boeing 737-700 Aircraft
The Boeing Company
Delivery Year Firm Orders Options Purchase Rights Total
2009 ...................................... 13 — — 13
2010 ...................................... 10 — — 10
2011 ...................................... 10 10 — 20
2012 ...................................... 13 10 — 23
2013 ...................................... 19 4 — 23
2014 ...................................... 13 7 — 20
2015 ...................................... 14 3 — 17
2016 ...................................... 12 11 — 23
2017 ...................................... — 17 — 17
Through 2018 .............................. — — 54 54
Total ..................................... 104 62 54 220
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