Southwest Airlines 2013 Annual Report Download - page 4
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We had other revenue benefits in 2013, including more aggressive network optimization
and new ancillary offerings. These offerings include increases in existing service charges,
selling open A1 through A15 premium boarding positions at the gate, and a new No Show
policy associated with restricted tickets that are not canceled (or changed) prior to departure.
We are committed to keeping our capacity roughly flat until we reach our 15 percent ROIC
goal. That is our plan for 2014, with available seat mile capacity flat, year-over-year. Beyond
2014, we will have the flexibility with our fleet plan to pursue growth opportunities, dependent
on our ROIC performance and outlook. October 2014 brings the repeal of the Wright
Amendment, which opens up Dallas growth opportunities not seen for quite some time. We
also have acquired takeoff and landing slots at New York’s LaGuardia Airport and had a
winning bid to acquire slots at Washington’s Reagan National Airport, both of which are rare
opportunities resulting from the required divestures by American Airlines as part of its merger
with US Airways. In addition, we believe we have significant near-international growth
opportunities. We are excited about our future growth prospects and intend to grow prudently
and in support of our ROIC goal.
I am incredibly proud of our People and their many accomplishments in 2013. Adjusted for
stage length, we continue to have significantly lower unit costs, on average, than the vast
majority of major domestic carriers. And, unlike many of our competitors, we have maintained
a strong Balance Sheet while returning more than $1.2 billion to our Shareholders through
share repurchases and dividends from August 2011 through the end of 2013. Based on our
current 2014 outlook and manageable capital spending, we expect another year of healthy free
cash flow, which will allow us to continue to return value to our Shareholders. Further, we
believe our strong 2013 financial performance provides great momentum for us to achieve our
profit requirement in 2014.
As with past years, our goals for 2014 are fundamental and oriented toward achieving our
Vision for Southwest, which is to be the World’s Most Loved, Most Flown, and Most Profitable
Airline. As ever, we strive to achieve our Purpose to serve our Customers by connecting them
to what is important in their lives through friendly, reliable, and low-cost air travel. It is with
great pride that I share Southwest was recently named to FORTUNE’s 2014 list of World’s
Most Admired Companies for the 20th consecutive year and notably, the only commercial
airline to rank in the Top Ten. This extraordinary recognition is a testament to the People of
Southwest Airlines. It is because of them that I have more confidence, more pride, and more
enthusiasm than ever for our future.
Gary C. Kelly
Chairman of the Board, President, and Chief Executive Officer
March 18, 2014